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Weren't they going to eliminate this need by updating while they were still in-box?
That process has to be done manually and only with 5 or 6 devices at a time.
And it can only be done in Apple stores.
It’s meant for people ordering an iPhone for in-store-pickup. In that case, the phone is updated in the box, but as I said, manually by an AppleStore employee.

It’s impossible to update millions of iPhones leaving several factorys in China an Inida!
 
When transferring from one device to another, don’t they have to be on the same OS version? If so, I sure hope it’s not updated out of the box.

I suspect most will be on iOS 18, but even those on iOS 26 will be on the non-iPhone17 version.

I would definitely upgrade first, as there's a chance the reason for this new version is to fix bugs in the transfer process!
 
Whenever I have a new device and it needs to be updated out of the box, I run quickly through the setup entering only what is required (WiFI) so that I get straight to the home screen. I don’t put in an AppleID, or setup FaceID, I just skip them. I run the update and then erase the device again. Then I do the transfer/restore.
That’s the best way to do it. 😊 Trying to transfer/restore/initial setup together with the forced update really bogs down the process in my experience. I think I remember having to abort my initial attempt, start over, and setup as you did.
 
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When transferring from one device to another, don’t they have to be on the same OS version? If so, I sure hope it’s not updated out of the box.
They WILL be on the same version, iOS 26.0. Just different builds of it. This will be a non-issue and as stated from others, most likey will be offered an update during transfer process. This isnt the same as being on iOS 26.1 on older device then trying to go to 26.0 on new device. Both will be 26.0
 
Many iPhones over the years (including the 5s) had day one updates or updates that were really close to the time of release. It happens....
IIRC, it was the exact same situation last year with the 16 Pro. I seem to remember having to update as soon as I took it out of the box on launch day. Same version, but different build.
 
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I’ve been able to go forward, but never back. Example: an old iPhone with 16 can transfer to a new iPhone phone with 18.
Yep, phone being transferred / restored to has to be on the same or newer iOS (major) version than the phone being transferred from / backed up, you can’t do it the other way round I think it complains that the backup is from a newer version. You get the same error with backups made to a Mac if you try and restore to a phone with an older iOS version than the one that was backed up.
 
Whenever I have a new device and it needs to be updated out of the box, I run quickly through the setup entering only what is required (WiFI) so that I get straight to the home screen. I don’t put in an AppleID, or setup FaceID, I just skip them. I run the update and then erase the device again. Then I do the transfer/restore.
Best way 👍🏼
 
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