Apple’s Growth Now Rides on Price Hikes. The Problem: “There’s a Wall” per Alex Kantrowitz Bobby Sankhagowit Thu, November 12, 2026 at 10:12 AM EST 5 min read AAPL +0.78% UBS -1.08% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
UBS expects Apple's iPhone revenue to rise 12% to $95 billion this holiday quarter even as unit sales fall 3%, so higher prices are carrying the growth.
Apple's price increases haven't stopped its gross margin from falling, so it may need more of them just to hold its margin.
Netflix is the warning: its revenue still grew 12% last quarter while viewers watched less, and its stock is down 53% from its June 2025 peak.
At about 38x forward earnings, right at its 10-year high, Apple's stock is priced as if buyers will never push back.
Apple (AAPL:NASDAQ) hit an all-time high this week. Its next record quarter will come from charging more for each phone.
UBS expects iPhone revenue to climb 12% to $95 billion in the holiday quarter, even as unit sales fall 3%. That would beat the record $85.3 billion the iPhone brought in during last year's December quarter.
Alex Kantrowitz, host of the Big Technology Podcast, thinks Apple may be heading for the same limit Netflix (NFLX:NASDAQ) hit. On this week's episode, while talking about Apple's ability to raise prices, he pointed to Netflix: "Raise prices, raise prices, raise prices, margin went up. … And eventually people are like, no, right? And it stopped growing and it got into trouble. So maybe there's a wall there for Apple."
Netflix stock now trades below where it was in November 2021, and it's down 53% from its June 2025 peak.
If UBS is right, the average iPhone will sell for about 15% more than it did a year ago. Apple's lineup now goes well past $1,000. Tech writer M.G. Siegler said on the same episode: "We now have a $2,000 plus iPhone. We have several models that are over $1,000." Apple has guided to total revenue growth of 7% to 10% for the December quarter, and analysts expect growth of about 10% in fiscal 2027 and 8% in fiscal 2028 (Apple's years end in September).
For those estimates to hold, buyers have to keep absorbing higher prices, since UBS sees fewer iPhones going out the door.
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Higher prices would be easier to love if they were making Apple's margin fatter. For most of a decade they did, and gross margin climbed from 38.5% in fiscal 2017 to 48.8% in fiscal 2026.
But as Siegler put it, "the margins are going the wrong way for the first time in a long time." Apple's gross margin was 47.9% in the September quarter, and about a point of that came from tariff refunds. On its latest earnings call, Apple guided to 45% to 46% for the December quarter because of higher memory costs and the cost of ramping up Siri AI. That forecast already includes this year's price increases, which Apple has called only a partial offset to memory costs. So Apple may need another round of increases just to keep its margin where it is, and each round brings it closer to whatever wall Kantrowitz has in mind.
There's a big difference between the two companies, though. You can cancel a streaming plan in a few clicks. Leaving an iPhone means leaving the apps, photos and messages tied to one of Apple's more than 2.5 billion active devices. So far, Apple's buyers are paying the higher prices. Mac revenue rose 24% to $10.8 billion in the September quarter even after June's MacBook price increases of $100 to $300. And new orders for the $2,000 foldable iPhone Duo won't arrive until late January.
Apple's CFO, Kevan Parekh, also said in July that memory costs explained more than 100% of each step down in gross margin this year. So the margin squeeze comes from what Apple pays for parts, and demand looks healthy.
Still, Netflix's problem didn't show up in its revenue first. Its third-quarter revenue grew 12% to $12.9 billion while viewers watched less, and the stock kept falling. For Apple, the number to watch is phones sold, and UBS already sees that falling 3%.
Apple trades at about 38x forward earnings. That's right at its 10-year high and far above its 24x average over that period.
Analysts expect normalized EPS to rise only about 6% in fiscal 2027, to $9.50. That's a lot to pay for single-digit earnings growth.
The way I see it, Apple hasn't hit Kantrowitz's wall yet. Its buyers have taken this year's price increases in stride, and an iPhone owner is far stickier than a Netflix subscriber ever was. But at 38x, the stock is priced as if buyers will never push back, and I'd want a lower price before buying. Of course, if memory prices ease next year, Apple could win back its margin without raising prices again, and this worry would look overdone.
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