By Christine Ji
The company is boosting the storage capacity of its devices, a move thought to be a prelude to expected Siri enhancements later this year
Apple announced its new iPhone 17e and iPad Air, and is expected to release an updated MacBook later this week as well.
On Monday, Apple unveiled its new iPhone 17e and a new iPad Air, refreshing its entry-level hardware offerings with updated chips to prepare for the rollout of new artificial-intelligence features later this year.
These launches kick off a three-day stretch of announcements for Apple. Anticipation is building for other expected product announcements, such as a MacBook Pro with the newest M5 chips as well as a new MacBook Air.
The iPhone 17e features the same A19 chip that powers the rest of the iPhone 17 lineup and starts at 256 gigabytes of storage for $599, a 50% increase in entry storage from the previous generation. The iPad Air is powered by the M4 chip and available in 11-inch and 13-inch sizes, priced at $599 and $799, respectively. The pricing remains the same as the previous models even with higher baseline storage, and also as Apple (AAPL) faces a supply-chain environment featuring skyrocketing memory-component costs.
The A19 chip is built on a next-generation 3-nanometer process and features a new 16-core Neural Engine paired with dedicated &#34;Neural Accelerators&#34; integrated into each GPU core, Apple said. This architecture is specifically designed to run AI models locally on the 17e at much faster speeds than previous generations, according to Apple.
For the iPad Air, the M4 chip doubles the RAM to 12 gigabytes on the base model, enhancing the on-device AI processing abilities of iPadOS 26, Apple said in a statement. The RAM upgrade is an especially critical component of Apple's upcoming Siri revamp, slated to launch later this spring. The introduction of Apple Intelligence in late 2024 sparked a RAM upgrade cycle, as Apple executives established 8 gigabytes as the floor needed to run the new software. The new iPad Air could be a signal that baseline RAM requirements are shifting even higher with the introduction of more powerful AI models.
&#34;We think Apple is strategically refreshing its product portfolio ahead of broader AI and Siri upgrades that are expected later this year, as today's product launches feature incremental hardware updates rather than a major redesign cycle, with the focus around enhancing memory and storage,&#34; Evercore ISI analyst Amit Daryanani said in a note to clients on Monday.
He added that Apple's tighter integration of its custom silicon &#34;should help drive some offsets to memory costs.&#34;
Read: Could Apple's Gemini deal be the catalyst the stock needs?
Many on Wall Street have bemoaned Apple's lack of a concrete artificial-intelligence strategy - especially relative to its &#34;Magnificent Seven&#34; peers, who are forecasting record sums for capital expenditures. That means the upcoming Siri release could be a key catalyst for Apple's stock.
Earlier this year, Apple inked a deal with Alphabet (GOOGL) (GOOG) to use Google Gemini to power its next generation of Siri. While exact details haven't been revealed, the partnership is expected to be engineered around Apple's Private Cloud Compute. The hybrid model will prioritize on-device processing via the A19's new Neural Accelerators, while routing more intensive reasoning tasks to Gemini models within Apple's secure servers.
Shares of Apple were down 0.2% on Monday and have fallen 2.6% year to date.
The Apple Intelligence upgrade comes at a time of severe logistical bottlenecks. Insatiable demand from AI data centers has manufacturers pivoting production to high-margin enterprise customers, creating an acute squeeze in the consumer sector. In a note Sunday, Jefferies analyst Edison Lee forecasted a 31% fall in global smartphone shipments this year.
&#34;Memory prices have skyrocketed way beyond our expectations,&#34; Lee wrote, highlighting that Apple could see its memory-component costs increase more than fourfold.
While Apple didn't comment during last month's earnings call on whether it would raise prices to offset component costs, Lee thinks such a move is an unavoidable future outcome. He projects that the average selling price of smartphones will increase 13% this year - though ASP increases aren't only a reflection of higher consumer-facing prices, as they can also reflect decisions to purchase more expensive storage configurations.
And Apple could still see a 5% market-share gain this year as a result of the memory shortage, Lee added, as its customers are less price-sensitive than those of other smartphone makers.
More: Here's how Apple's stock can surge in the face of rising memory costs
-Christine Ji
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
03-02-26 1916ET

AAPD

AAPL

AAPB

AAPU

AAPX

Apple has launched the new iPhone 17e and iPad Air, enhancing storage and processing capabilities in preparation for upcoming AI features. The iPhone starts at $599 with 256GB storage, while the iPad Air, powered by the M4 chip, is priced at $599 and $799 for different sizes. Analysts suggest these updates are strategic ahead of significant AI upgrades, particularly for Siri. Despite rising memory costs, Apple aims to maintain market share, although a price increase may be necessary. Shares of Apple fell 0.2% on Monday, reflecting broader market concerns.

- Apple announced its new iPhone 17e and iPad Air, enhancing storage and processing capabilities ahead of anticipated AI features, particularly for Siri.  
- The iPhone 17e features an A19 chip with 256 GB storage starting at $599, while the iPad Air has an M4 chip and offers increased RAM, aligning with AI improvements.  
- Analysts note these updates position Apple strategically for future product launches and AI integration, despite challenges from rising component costs and a competitive market landscape.

Apple launches new iPhone and iPad Air as it gears up for a major AI push