Apple's new CEO, John Ternus, is facing his first major challenge with the launch of the company's first foldable iPhone, expected to be unveiled on Wednesday. This device, rumored to be called the iPhone Duo, marks a significant shift for Apple by introducing both a foldable screen and a starting price point above $2,000, with some configurations potentially reaching $3,000. The company initially targeted a $1,999 starting price, but a global memory chip shortage pushed costs up by about $200, making the entry-level price $2,000 for 256 GB of storage.
The development of the foldable iPhone has been ongoing for at least eight years, conceived under Ternus's predecessor, Dan Riccio, and with significant involvement from former CEO Tim Cook. Apple has focused on resolving key technical challenges, including reducing screen crease visibility, improving hinge reliability, developing flexible cover glass, and integrating under-display camera technology. Despite potential drawbacks like reduced durability, inferior camera systems, and shorter battery life compared to conventional iPhones, Apple employees reportedly believe the company will sell all units it can produce.
Analysts view this launch as a crucial move to revive consumer interest in a saturated smartphone market. Edison Lee of Jefferies noted that Apple cannot rely on its current form factor for continued growth and needs new designs. UBS analyst David Vogt anticipates Apple selling at least 10 million foldable iPhones in the first year, matching Samsung's recent annual sales. This would significantly increase the average price of Apple's devices, even though foldables currently represent only 2% of global smartphone sales. IDC projects that Apple's entry will make foldables the only segment of the smartphone market to grow in 2026, with Apple potentially capturing a 40% share by 2027.
Beyond the foldable, Apple is expected to implement broader price increases across its entire iPhone range, as well as for Macs and iPads, due to component shortages, particularly memory chips. This strategy aims to offset rising supply chain costs and maintain high profit margins. While a recent survey indicates 25% interest in the iPhone Ultra, interest sharply declines above the $2,000 price point, raising concerns about consumer tolerance for higher prices. The foldable iPhone is expected to perform particularly well in China, where Huawei has already seen success in the foldable market.
