Apple’s iPhone Air Might Help Sales. The Market Has Doubts.

Apple’s iPhone Air starts at $999. (Courtesy Apple)

One out of two is, well, so-so.

Apple’s investors and customers have been hoping the company will deliver an exciting new version of the iPhone, as well as artificial intelligence that can compete with the likes of ChatGPT. The company may have checked off the first of those targets on Tuesday.

Apple held its annual product event, unveiling updates for the Apple Watch, AirPods, and of course, iPhones. The one getting the most attention is the iPhone Air, Apple’s thinnest smartphone ever and the first major physical change to the iPhone in years.

The iPhone Air is 5.6 millimeters thick, versus 8.8 millimeters for the iPhone 17 Pro, and starts at $999. While that thin body means its battery life and camera quality won’t be as good as its Pro counterpart, the Air is powered by Apple’s own chip—the new A19 Pro.

The iPhone Air does something that Apple surely needed, giving customers a new option. Apple has received criticism in recent years that its iPhone launches have missed the mark: Their cameras and battery life improved, but the devices themselves didn’t seem to change much from their predecessors.

“We think this will be a new form factor design that could help reinvigorate Apple’s user base and be the start of a multi-year iPhone roadmap,” Evercore ISI analysis Amit Daryanani wrote in a research note Tuesday. He increased his price target on Apple to $260 from $250 and maintained an Outperform rating on the stock.

Not everyone on Wall Street is as optimistic, though. Shares of Apple were down 3.3% to $226.73 on Wednesday. The stock has dropped 9.5% this year.

“The iPhone family welcomes a new member, iPhone Air, a curiously positioned device in our view,” Oppenheimer analyst Martin Yang wrote on Wednesday. “With Air’s pricing (similar to past years’ Pro models) and obvious shortcoming on battery life and imaging capabilities, it feels more like a one-time transition to a foldable iPhone in 2026.”

Bloomberg has reported that Apple is planning to release a foldable iPhone next year.

Apple investors are hoping that the new phone will encourage a wave of Apple owners to get new iPhones, in a so-called upgrade cycle. That was originally expected to happen when Wall Street was waiting for the company to announce its AI plans.

While Apple Intelligence has been launched, the release of the most highly anticipated AI capabilities—an updated version of Siri—has yet to come, which means people have yet to run out and buy devices that would allow them to try the software. Apple expects to launch its updated Siri sometime next year.

The question now is whether the iPhone Air can bring on a wave of upgrades while the company works on AI in the background.

The new iPhones can be preordered on Friday. They will be available on Sept. 19.

Write to Angela Palumbo at angela.palumbo@dowjones.com