Apple Inc. (NASDAQ: AAPL) recorded 12% year-over-year growth in iPhone 18 Pro series sales during the first three days of availability in China, according to Counterpoint Research. This performance helped Apple secure the No. 1 smartphone position in the country during Week 38 with a 33% market share, despite broader market declines.

Premium demand defies soft market trends

The growth occurred against a backdrop of declining weekly smartphone sales in China, which fell by double digits year over year since July due to soft consumer demand and rising memory costs. Counterpoint Senior Analyst Ivan Lam noted that the delayed launch of the base iPhone 18 model likely encouraged consumers to trade up to the Pro series. Additionally, price hikes exceeding $200 on many Chinese flagship models raised the price anchor, strengthening the relative value proposition of the iPhone.

Counterpoint expects September’s new product launches to support a sequential market recovery. The firm also projects that the latest generation of Chinese Android flagships will sell fewer units than their predecessors in the fourth quarter, as higher memory and 2nm-chip costs drive prices upward.

Delivery times signal shift to premium models

Gene Munster, Managing Partner at Deepwater Asset Management, indicated that Apple’s premium-first strategy is yielding results. Munster’s tracking across eight countries revealed that delivery lead times for iPhone 18 Pro and Pro Max models are 15% longer than a year ago. This contrasts with his initial expectation for shorter lead times, suggesting consumers are choosing premium models rather than waiting for the base iPhone expected in spring 2027.

Munster argued that consensus fiscal 2027 iPhone revenue estimates of $9.5 billion are too low, stating, "I think the Street is still 10% too low on iPhone revenue for FY27." He estimated that the upcoming foldable Duo, priced at $2,100, could capture 35% market share in its first year, with roughly one-third of Pro Max users potentially migrating to the foldable device.

What the numbers show

The divergence between overall market contraction and Apple’s specific growth highlights a structural shift in consumer preference. While the broader Chinese smartphone market contracted by double digits, Apple’s Pro series grew by 12%. This indicates that price sensitivity is less acute among premium buyers or that competitors’ price hikes have effectively pushed high-end consumers toward Apple’s ecosystem. Furthermore, the projection that the foldable Duo will represent 8% of iPhone units but 14% of iPhone revenue underscores the disproportionate revenue contribution of premium form factors, suggesting average selling prices are becoming a more critical driver of top-line growth than unit volume alone.

Analyst consensus and ETF exposure

Apple stock currently carries a Buy rating with an average price forecast of $335.57. Recent analyst actions include:

• Morgan Stanley: Overweight (Maintains Forecast to $360.00) (Sept. 29)
• B of A Securities: Buy (Maintains Forecast to $370.00) (Sept. 23)
• Evercore ISI Group: Outperform (Raises Forecast to $380.00) (Sept. 18)

AAPL shares were down 0.06% at $329.19 during premarket trading on Wednesday.

Apple Inc (NASDAQ: AAPL) commands significant valuation multiples relative to its Technology Hardware, Storage & Peripherals peers, trading at a Price-to-Earnings ratio of 37.78 compared to the updated industry average of 43.98.

The Cupertino-based firm’s premium pricing is underpinned by superior profitability metrics and scale, though its revenue growth lags the sector average.

Valuation Premiums

Apple’s valuation metrics exceed industry benchmarks across key multiples, although its P/E ratio is slightly lower than the peer average:

The stock’s Price-to-Book ratio of 44.71 is more than two times the sector mean, while its Price-to-Sales multiple of 10.43 suggests investors are paying a substantial premium for each dollar of sales.

Profitability vs Growth Divergence

Despite higher valuations on book value and sales, Apple demonstrates robust operational efficiency. Its Return on Equity stands at 27.84%, surpassing the industry average of 22.33% by 5.51 percentage points.

The company generates $39.02 billion in EBITDA, which is 21.92 times the peer average of $1.78 billion. Gross profit totals $54.77 billion, significantly outpacing the sector norm of $2.15 billion.

However, this profitability comes with slower top-line expansion. Apple’s revenue growth of 16.36% trails the industry average of 66.52%, indicating a mature market position compared to faster-growing peers like SanDisk Corp (371.59%) and Super Micro Computer Inc (93.16%).

Balance Sheet Strength

Apple maintains a conservative capital structure with a Debt-to-Equity ratio of 0.78. This figure is lower than its top four peers in this metric, suggesting a stronger financial position and lower leverage risk relative to competitors.

What the Numbers Show

A critical divergence exists between Apple’s valuation multiples and its growth trajectory. While the stock trades at nearly double the industry average on a Price-to-Sales basis, its revenue growth (16.36%) is less than one-quarter of the sector average (66.52%). This suggests the market is pricing Apple not on current sales acceleration, but on its exceptional profit margins ($54.77 billion gross profit) and high Return on Equity (27.84%), treating it as a quality compounder rather than a high-growth hardware play.