How Wall Street viewed Apple’s foldable iPhone and what Duo means for the stock
Wall Street had mostly good things to say about Apple’s first foldable iPhone, which the company debuted Wednesday as part of a wider annual product launch. But some analysts worry that the new device has limited appeal. Apple shares were up less than 1% in early trading Thursday to almost $318, bucking a multi-year trend when the stock retreated the day after a major product introduction. Apple shares have fallen or been little changed the day after a launch more often than they’ve risen, according to a Tuesday analysis by Bank of America of major product releases going back to 2007. AAPL 5D mountain Apple shares over the past five days Enthusiasm toward the new foldable iPhone Duo centers on its look and cheaper-than-expected starting price of about $2,000. “At a $1,999 starting price, Duo remains an expensive device, but it launched meaningfully below many investor expectations ($2,300-$2,500) and even $1 below Samsung’s Galaxy Fold7,” Morgan Stanley analyst Erik Woodring wrote in a Thursday note. “Apple is prioritizing adoption rather than maximizing near-term economics.” ‘Attractively priced’ Samik Chatterjee at JPMorgan called the Duo “attractively priced” in a Wednesday note and said the cost opens “up an opportunity for switchers” from other foldable smartphones. Ben Reitzes at Melius liked the combination of a thin and sturdy phone. “This foldable on Ozempic is gonna be a hit,” he wrote. But the small size of the market for bendable phones relative to the broader smartphone market concerned other analysts. “We worry that foldable smartphones (which have been available for many years from other companies) are only 5% of total, suggesting weak consumer demand for this form factor,” Laura Martin at Needham told clients Thursday. Bank of America, buy, price target $370 “The Duo represents a meaningful form-factor change after a long time and seamlessly integrates hardware and software. The device opens up a larger [total addressable market] for Apple where the foldable screen enables iPad like productivity” – Wamsi Mohan UBS, neutral $296 “Apple raised Pro and Pro Max prices by $100, in-line with our expectations. While this increase does not fully offset higher memory costs, we believe a larger $200 increase would have weighed on iPhone demand” – David Vogt Jefferies, underperform $264 “We believe AAPL is worried about the volume impact of bigger price hikes, and would like to protect volume at the expense of margin. It makes sense for AAPL to prioritize volume over margin, since 1) volume will give AAPL supply chain bargaining power, which has never been more important given AI players’ soaring demand for semiconductors, 2) a rising iOS installed base will be key to growing the high-margin service revenue, and 3) competition is rising for the high-end segments given soaring memory prices.” – Edison Lee Evercore ISI, outperform $365 “Apple unveiled updates to Apple Intelligence and Siri AI. This brand-new version of Siri finds personal context across apps allowing Siri to provide customized responses to users. This comes along with an update to Productivity where Apple Intelligence can update calendars automatically, surface relevant information such as when on phone calls. The Camera app also features major upgrades with an upgraded cleanup tool, extending images, changing the spatial framing after a picture is taken, and smart focus” – Amit Daryanani Baird, outperform $330 “The iPhone 17 cycle was largely a success, and we think this year’s 18 cycle can build on that. Following years of declining smartphone upgrade rates, green shoots have emerged, with iPhone growth re-accelerating to > 20% the past few quarters” – William Power