KeyBanc’s Consumer iPhone survey showed that there is healthy demand for Apple’s (NASDAQ:AAPL) iPhone 17 models but “not overly optimistic upgrade intentions going forward.”
Analysts led by Brandon Nispel said they conducted a survey of 2,052 current iPhone users between Sept. 19 and Oct. 10 (post iPhone 17 launch).
The analysts said the findings show that the upgrade intentions are solid but expected to downtick in the next 12 months. They noted that 17% of respondents indicated they pre-ordered/already bought an iPhone 17, which indicates healthy upgrade activity.
“That said, when asked how likely are you to upgrade to the new iPhone in the next 12 months, 48% indicated they were likely or extremely likely to upgrade, which was a downtick from 59% last survey,” said the analysts.
The data showed Pro/Pro Max adoption continues, but iPhone Air demand weak, while the standard model shows a downtick. Of those who have already bought the iPhone 17, 78% opted for the Pro/Pro Max versus 19% for the base model, and just 3% for the Air, according to the analysts.
The analyst noted that there is a long-term loyal growing customer base for Apple. The data suggested that 68% of respondents have been an iPhone user for five years or greater, and likewise, 58% of respondents are unlikely or extremely unlikely to switch to a different Smartphone provider.
Nispel and his team said that there is reasonable demand for foldables but low willingness to pay for a foldable device.
“Despite 45% of respondents being interested in a foldable device, 65% of respondents indicated they would be interested at a price point of <$1,499, 35% are interested above $1,500, and just 13% of those that are interested are willing to buy over $2,000,” said the analysts. The survey found that most interest for a foldable device would likely come from Pro/Pro Max users.
In addition, the data showed that there is declining interest in AI. The data showed 46% of respondents are familiar with Apple Intelligence, features in iOS 26 (in line with last survey), though AI features aren’t driving upgrades. Further, 61% are not willing to pay for Apple Intelligence features compared to last survey’s 53%. The analysts saw a broad downtick when asked how much would people be willing to pay for AI across all potential spending categories.
For Apple, the analysts think this means a likely fourth quarter iPhone revenue beat, and first quarter iPhone revenue in line, supported by stronger units initially and average selling price, or ASPs, thereafter.
“NT [near term] upgrade demand appears healthy but might fade, and certainly not a “super-cycle,” said Nispel and his team. The analysts think survey responses suggest a healthy level of demand for the iPhone 17, but they think upgrade expectations should be moderate looking forward as there was a pull-forward in activity early in the year on tariff-related concerns, and survey respondents indicated their upgrade intentions in the next 12 months were lower than in the prior year.
Looking out to 2026, the analysts think there is likely to be unit pressure in the medium term driven by — tariff pull-forward in 2025; headwinds from comparing against the SE launch in 2025; and an air-pocket in demand mid-2026, partly driven by these two factors, as well as anticipation of an iPhone 18 cycle.
Nispel and his team think there is certainly a case to be made for higher ASPs. With mix continuing to skew toward Pro/Pro Max models and the Pro model price increase, the analysts think there is fairly clear proof that ASPs are likely moving higher.
“Still searching for the elusive fourth SKU in the iPhone lineup, and it doesn’t look like a foldable, in our view. We think it is safe to say the iPhone Air is a commercial failure, joining the iPhone Plus and the iPhone Mini as other fourth SKUs in the iPhone lineup with relatively limited traction,” the analysts added.
Nispel and his team said they saw a notable downtick in consumers’ willingness to pay for Apple Intelligence, which they attribute to the plethora of free AI services coming to the market in the last one year
“The view last year was that Apple Intelligence would drive an upgrade cycle, though that clearly didn’t develop, and now we are beginning to question how Apple will monetize AI, if at all,” the analysts noted.