Apple's (AAPL) new iPhone prices are lower than expected, which could boost sales but also put pressure on gross margins due to higher memory and component costs, BofA Securities analysts said in a Wednesday note.

Analysts said that the new iPhones will allow artificial intelligence models to run on-device, while using Private Cloud Compute for more complex requests, with Siri AI set to become more capable and personalized over time.

BofA said the iPhone Duo opens up a larger total addressable market for Apple, with the foldable screen enabling iPad-like productivity.

Analysts raised their iPhone unit expectations for fiscal 2026 and fiscal 2027 by 2 million and 5 million units, respectively.

BofA reiterated its buy rating on Apple but lowered its price target to $370 from $380.

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