Jefferies said that Apple’s (NASDAQ:AAPL) margin is at risk due to the iPhone 17 product mix and tariffs, while separately noting that the new iPhone “momentum continues to cool off.”
The firm lowered the price target on Apple’s stock to $203.07 from $205.16 and maintained its Underperform rating.
Analysts led by Edison Lee said Apple may not be totally off the tariff hook. Not only could the current tariff-exempt status of smartphones change, but the uncertainties around the U.S.-India and U.S.-China tariff frameworks are underestimated risks, the analysts added.
The analysts noted that U.S. President Donald Trump has imposed an additional 100% (now 30%) tariff on Chinese imports, whether smartphone imports from China would continue to be exempted remains uncertain.
“Since AAPL will unlikely be able to meet 100% of US demand for iPhone 17s from India, we estimate a ~5% on AAPL’s FY26E EPS if it has to pay 130% tariff on those portions of iPhone 17 that need to be imported from China into the US. This estimate may be generous, as the US demand for other AAPL products may also not be 100% met by non-China production, not to mention the 20% tariff on Vietnam (a framework agreement),” said Lee and his team.
The analysts added that the market may think Apple will be exempted in any case given the company’s commitment to invest $600B in the U.S. it could come under more pressure from Trump to make iPhones in the U.S., if the U.S.-China conflict further escalates. “This is not good for margin,” the analysts noted.
Lee and his team said the iPhone 17’s sales momentum has shown further slowdown. The base model continues to show strength, driven by an effective price cut, and more aggressive pricing in China to take advantage of government subsidies, the analysts added. The analysts estimate iPhone 17 base would constitute 36% of total 17 sales in fiscal 2026, up from 32% for the 16 base model in the fiscal 2025.
iPhone 17 Momentum
In a separate note, Lee and his team said their latest tracking shows that the delivery lead time for the iPhone 17 Pro/Pro Max has been falling mostly across the six markets they track. The trendis the most consistent for 17 Pro Max, where all six markets showed shortening lead time in the last two weeks, with the U.K./Germany having zero lead time.
For 17 Pro, the lead time has been falling the last few weeks except Japan, and U.K./Germany also showed no lead time anymore. The lead time for the 17 base model has been holding up the best (17 to 22 days) among the four models, although the U.S. and U.K. are in single-digit days, te analysts added.
“Therefore, we believe the 17 base remains the strongest-selling 17 model, and the mix will be tilted toward the base much more than last year. For 17 Air, there remains zero lead time in all 6 markets we track. Therefore, we believe 17 Air is the weakest model of all four, which is contrary to market expectations. However, if China approves eSIM in the next two months, that may provide 17 Air some support, but it could be at the expense of 17P,” said Lee and his team.
The analysts said their tracking also shows that the lead time of both 17 Pro and Pro Max is now lower year-over-year (versus the 16 Pro/Pro Max same time last year), except for 17 Pro Max in Hong Kong. The 17 base model has a much higher lead time year-over-year (it was zero last year across all six markets), indicating much stronger demand versus the 16 base model.
The analysts added that the trend of resale prices is mixed, as 17 Pro has fallen while select 17 Pro Max variants have risen.
Shares of Apple were up about 1% premarket on Monday.