Analyst Warns That Expectations for Foldable iPhone from Apple Are Overblown

While anticipation mounts for Apple’s foldable iPhone, which is not expected to launch until next year, discussions surrounding this innovative device are already creating a significant buzz among industry analysts. Jefferies analyst Edison Lee has contributed to this dialogue with a recent report expressing a cautious outlook on the forthcoming device.

Overview

Changes in Projections – The Jefferies analyst has slightly raised his iPhone sales forecasts for fiscal years 2025 and 2026, while simultaneously lowering expectations for fiscal year 2027. This adjustment is primarily attributed to anticipated lower demand for the iPhone 18 Pro and Pro Max, as well as the new foldable iPhone. Lee argues that the projected surge in base iPhone 17 demand due to an implied price reduction is already accounted for in the current pricing models.
Significance – Despite a robust outlook for Apple in the short term, driven by high demand for the standard iPhone 17, this positive trajectory may not be sustainable going forward.

Demand Increase from Base iPhone 17 Already Factored In

Insights from the Analyst: “Stronger demand for the iPhone 17, driven in part by a price reduction for the base model, is already reflected in the market.”

Background: The base iPhone 17 has implicitly seen a price drop of $100, now offering 256 GB of base storage compared to the previous generation’s 128 GB at the same retail price point.

Apple’s Foldable iPhone May Fall Short of High Hopes

Analyst’s Take: “[The strong performance of the base iPhone 17] has resulted in inflated expectations for the foldable iPhone 18, ”with estimates projecting sales of only 12.5 million units for the upcoming model.

Market Context: Recent reports from Nikkei Asia suggest that Apple aims for significant production volumes of the foldable iPhone, targeting sales of up to 95 million units. This ambitious plan includes a goal of achieving a 10% increase in smartphone shipments by 2026, relying on the desired contribution of the foldable iPhone to meet this target.

iPhone Shipment Volumes Forecast: Growth and Contraction

Analyst Insights: “We have adjusted our iPhone unit growth estimates for FY2025, FY2026, and FY2027 to 7%, 1%, and -1%, respectively, up from previous estimates of 5%, -3%, and 0%.”The analyst notes that a $100 increase in the prices of the iPhone 18 Pro and Pro Max is expected to temper demand for these key margin products.

Current Sales Data: Apple reportedly shipped approximately 232 million iPhones in 2024. Predicated on this, the projected sales volumes for the upcoming years are:

FY 2025: 248 million units
FY 2026: 250 million units
FY 2027: 248 million units

Uncertainties Ahead

Exact specifications of the foldable iPhone remain undisclosed.
Will Apple introduce further price reductions to stimulate demand, particularly by increasing base storage?
Can the current forecasts by the Jefferies analyst hold true in the coming months?
Is the anticipated super upgrade cycle set to materialize as expected next year?

What Lies Ahead?

Keep a close watch on supply chain reports to gauge Apple’s adjustments in demand projections for the foldable iPhone.
Monitor lead times for the iPhone 17 as an indicator of sustained demand.
Stay informed on analyst reports to track shifts in Wall Street predictions.

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