Apple’s latest iPhone 17 lineup has ignited strong consumer demand, and Wall Street is taking notice. In a fresh note, Goldman Sachs projects robust growth for Apple’s hardware and services, while cautioning that looming regulatory shifts and payment policy changes could chip away at the App Store’s dominance and test the durability of iPhone demand.
Key takeaways from Goldman Sachs’ outlook:
– Products revenue is expected to rise 10 percent year over year in Apple’s fiscal fourth quarter of 2025, with Mac sales climbing 12 percent.
– Tariff-related costs of roughly $1.1 billion in fiscal Q4 2025 are projected to trim gross margin to about 46.5 percent.
– Services revenue is forecast to grow 13 percent year over year despite softer App Store spending, buoyed by momentum in iCloud+, TAC, AppleCare+, Apple Pay, and other subscriptions.
– The iPhone 17 family is set to maintain strong momentum into fiscal 2026 (which began in October 2025), supported by competitive US carrier promotions and continued form factor innovation, including the expected debut of an iPhone 18 foldable.
Goldman Sachs also flags two rising risks:
– The sustainability of iPhone demand if trade policy uncertainty pulled forward upgrades into FY 2025, potentially dampening future replacement cycles.
– App Store revenue pressure as third-party payment options gain traction, reducing Apple’s control over in-app transactions.
Regulatory and legal pressure on the App Store is building across key global markets. In China, an antitrust complaint challenges Apple’s control over app distribution and payment methods, highlighting differences with other regions where off–App Store payments or alternative app stores are permitted. In the European Union, Apple now allows third-party app stores under the Digital Markets Act. In the United States, a court ruling in the Epic case requires Apple to allow external payment methods and restore Fortnite, while Apple’s plan to continue charging commissions on those payments has drawn a stern judicial warning that could escalate to contempt proceedings and even criminal charges. That precedent is fueling similar demands elsewhere; in Australia, Epic has asked the court to permit sideloading of its apps without any commission.
The bottom line: Apple heads into fiscal 2026 with strong iPhone 17 sales, solid Mac momentum, and a services engine that keeps growing even as App Store spending softens. But regulatory challenges and the spread of third-party payment routes could reshape App Store economics, while any demand pulled into FY 2025 may test iPhone upgrade strength later on. For investors and industry watchers, the major themes to monitor are iPhone 17 sell-through, the timeline and impact of an iPhone 18 foldable, the trajectory of services growth beyond the App Store, and how global rulings on payments and app distribution ultimately recalibrate Apple’s margins and competitive moat.
