Apple's iPhone Air doesn't look like a best-seller. It might not matter.

Apple's recent earnings report has become a focal point for investors as it reveals the inaugural sales figures for the iPhone 17. This report encompasses sales data up until the end of September, incorporating just over a week’s worth of sales for the latest iPhone models, which hit the market on September 19. In the lead-up to this report, Wall Street has shown optimism towards Apple’s stock, largely due to early industry estimates indicating that the iPhone 17 is performing well. However, investors are keenly interested in Apple’s insights regarding demand, as they hope this year could mark a significant growth period following the decline in iPhone revenue since fiscal 2022. Analysts from FactSet anticipate that Apple will surpass previous sales records by fiscal 2025. Third-party evaluations from analysts and industry experts suggest an upswing in iPhone sales this cycle, particularly for the entry-level iPhone 17, which features an advanced chip and a display with a higher refresh rate. The iPhone 17 Pro models have also garnered attention due to their sleek aluminum frames and enhanced battery life. In contrast, the newest release, the iPhone Air, is reportedly not attracting the same level of consumer interest. Wells Fargo analyst Aaron Rakers noted a less-than-expected increase in sales for the iPhone Air, indicating that the response has been more subdued than previously anticipated. This trend is not new for Apple, which typically witnesses the strongest sales growth during the launch of new models that broaden its range. Since the introduction of a four-model lineup in 2020, the sales of the fourth model have consistently lagged behind those of the standard and Pro versions. Since 2020, Apple has transitioned from the 'Mini' to a 'Plus' version with a larger screen, and now it is experimenting with the 'Air' model. Although Apple does not disclose sales figures for individual devices, CEO Tim Cook and CFO Kevan Parekh often share insights during earnings calls regarding product launches and demand during the quarter. When the iPhone Air was launched at a price point of $999 in September, Cook described it as an "iPhone that feels like a piece of the future." Positioned between the iPhone 17, starting at $799, and the iPhone 17 Pro at $1,099, the iPhone Air is designed to be thinner and lighter than its counterparts. However, this comes at the cost of having only one camera lens and a shorter battery life. Despite its unique design and positive reviews, the iPhone Air's sales in China, where it only became available earlier this month, reflect a different trend. Reports indicate it sold out swiftly, but overall consumer preference continues to lean towards familiar models. A report from Nikkei suggested that Apple has significantly reduced component orders for the iPhone Air while increasing orders for its other models. Ming-Chi Kuo, a notable analyst from TF International Securities, corroborated this, mentioning that the iPhone Air has not met expectations, indicating that existing Pro and standard models adequately satisfy high-end consumer demand. While the lackluster performance of the iPhone Air may not signify a major shift for Apple, it does highlight a recurring theme since 2020, where one of the four new models consistently underperforms. Analysts from Goldman Sachs observed that shipping lead times for the iPhone Air aligned closely with previous models, suggesting demand is comparable. Despite its struggles, some experts believe that the iPhone Air could serve as a stepping stone for a more varied lineup, potentially paving the way for future innovations like a foldable iPhone. The device's slim design hints at what half of a folding phone might resemble, and the absence of a numerical designation implies it may not undergo annual updates. If Apple’s other iPhones continue to enjoy robust sales, the underperformance of the Air may not significantly impact investor sentiment, particularly as fresh designs keep the overall lineup dynamic. Goldman Sachs analyst Michael Ng remarked that Apple is likely to maintain smartphone relevance through innovative updates, with speculations of a foldable iPhone debuting in 2026 and an all-screen model in 2027. Apple has yet to provide additional comments on the matter.