Pain or gain ahead of Apple? ETFs in focus

Apple (AAPL - Free Report) shares have gained 1% over the past one month (as of Sept. 12, 2025), have jumped 9.4% over the past six months and have lost 4% so far this year. Its shares failed to infuse enthusiasm into investors’ minds after its much-hyped iPhone 17 launch in early September.

Despite updates to the Apple Watch and AirPods with real-time translation, investors did not find much in the event that could drive the stock. Market watchers probably viewed the iPhone 17 launch as only incorporating modest enhancements rather than radical features (as quoted on Economic Times), dampening hopes for a strong upgrade cycle.

Against this backdrop, below we discuss what awaits Apple shares ahead.

Competition from Xiaomi?

Chinese Xiaomi Corp. will launch its next flagship smartphone this month, jumping from the Xiaomi 15 line to the Xiaomi 17 series directly to challenge Apple in the premium market. Xiaomi is also launching its flagship phone sooner than its regular schedule, per a Bloomberg report, as quoted on Yahoo Finance.

The new 17 Pro and 17 Pro Max look to rival Apple’s iPhones. Apple’s iPhone 17 launches hit the globe recently. Apple currently holds 62% sales of the $600 and above smartphone market, per Counterpoint Research (as quoted on the above-mentioned Bloomberg article published on Yahoo Finance).

Although Xiaomi has a small share in the premium segment, its premium sales surged 55% in the first half of the year. This indicates that Xiaomi is eyeing to capture market share in the finest segment (at least in China), though on a gradual basis.

Note that, per IDC data for second-quarter 2025, Samsung topped the global smartphone market share leadership chart with 19.7%, while Apple was second with 15.7%. Xiaomi took the third position with a 14.4% market share.

Apple still remains a strong player in China: What lies ahead?

While AAPL is still a strong player in China, especially benefiting from the government subsidies, the road ahead can prove to be anything but easy. China's government provides subsidies to boost domestic consumption.

Shoppers in Beijing and Shanghai can now get discounts of up to 2,000 yuanon selectMac computer models, while select models of the iPhone, iPad and Apple Watch that cost below 6,000 yuan are eligible for a subsidy of up to 500 yuan, per Apple, as quoted on South China Morning Post.

Note that iPhone shipments in China are forecast to drop 1.9% in 2025 (per IDC), owing to intense competition from Chinese smartphone makers like Huawei and the country’s economic slowdown, as well as the exclusion of most of its models from government subsidies capped at 6,000 yuan.

However, we expect a smart pricing strategy from Apple, which can allow the company to make the most of this subsidy program.Greater China sales accounted for 16.3% of Apple’s total sales in Q3 of fiscal 2025. Therefore, any pressure in this geographic segment could be a cause for concern.

Subdued AI progress compared with other big tech peers

There are continued concerns about Apple's progress in artificial intelligence, as some AI features have been delayed and investors are seeking a solid AI roadmap from the company. Apple's personalized and AI-powered Siri is expected to debut in spring 2026. AAPL had earlier suggested that a much better Siri would come this spring, as quoted on Investopedia.

Most recently, Apple’s lead artificial intelligence researcher for robotics has left the company (per Bloomberg) to join Meta Platforms Inc.’s challenging efforts. Separately, three more AI researchers have parted ways with Apple’s in-house large language models team, putting AAPL’s AI innovation process in question, as quoted on Bloomberg.

What are the Silver linings?

Apple’s CEO Tim Cook revealed that the company acquired “around seven” firms this year, and most of them were smaller buys, as quoted on AIinvest.com. These acquisitions facilitate Apple's aim of embedding AI into its ecosystem.

Meanwhile, Bloomberg reported in early September that Apple is planning to launch its own artificial intelligence-powered web search tool next year in a bid to compete with OpenAI and Perplexity AI Inc.

Valuation-wise, Apple stock is moderately costly. For example, Apple shares trade at a forward P/E of 31.8X, which is much higher than the forward P/E of 23.75X possessed by Xiaomi (per Yahoo Finance) and slightly higher than the underlying industry’s (i.e., Computer-Office Equipment Market) forward P/E of 28.2X.

Apple’s return-on-equity (ROE) is 170.9% versus a 127.3% industry ROE. Meanwhile, Apple’s return-on-asset (ROA) is higher at 31.9% versus the industry ratio of 27.9%.

Price target

Based on short-term price targets offered by 34 analysts, the average target price for Apple is $241.14. The forecasts are between a low of $180.00 and a high of $300.00. The average price target represents an increase of 4.83% from the closing price of $230.03 recorded as of Sept. 11, 2025.

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