'Who's paying $2,800 for an iPhone?' — Apple stumbles on all-glass plan, foldable seen as niche product

Apple has hit production hurdles in its development of a so-called all-glass iPhone — a flagship design it had been pursuing to mark the 20th anniversary of the iPhone — and analysts now warn that its other high-end bet, a foldable iPhone, is unlikely to become a mainstream growth driver either. With memory chip prices rising sharply, the top-tier foldable is expected to carry a price tag well above 4 million won ($2,830) in South Korea, fueling doubts about Apple's strategy of using premium new products to expand its average selling price.

According to MarketWatch on Monday (local time), a Jefferies analyst team led by Edison Lee said in a report that Apple's all-glass iPhone had been canceled due to production yield problems.

The all-glass iPhone had been seen as a step toward the vision of a smartphone that looks like a single pane of glass — a concept originally conceived by former Apple chief design officer Jony Ive. The project drew wide market attention amid expectations that Apple would pursue a sweeping design overhaul next year to mark the iPhone's 20th anniversary.

According to Jefferies, the device had originally been slated for a September release next year at an average selling price of $2,060, more than double the starting price of the current iPhone 17 Pro Max at $999.

Based on supply chain research, Jefferies called the all-glass iPhone's development setback a "significant blow" to Apple's strategy of lifting the iPhone's average selling price by introducing new form factors.

That leaves the foldable iPhone, expected to be unveiled this fall, as Apple's remaining card to play. But Jefferies said even that device is more likely to remain a niche product targeting a narrow segment of consumers than a mass-market growth engine for Apple's earnings.

Price is the biggest obstacle. Analyst Lee projected that the so-called iPhone 18 Fold would carry a price tag of $2,199 to $3,099 depending on storage capacity, once rising memory chip costs are factored in. At the top configuration, that translates to well over 4 million won at domestic Korean prices.

That is a far cry from expectations in some corners of the market that the foldable iPhone would spark strong pent-up upgrade demand and become a new growth engine for Apple. If high prices limit sales volumes, the device may help lift Apple's average selling price and margins while doing little to boost overall iPhone shipments.

Surging memory chip prices in recent months have added further pressure on Apple's pricing strategy.

Morgan Stanley analyst Erik Woodring said in a recent report that Apple's average DRAM procurement cost is expected to surge 370 percent between fiscal years 2025 and 2027. He added that price increases of around $200 are likely across the entire iPhone 18 lineup, not just the foldable model.

Jefferies downgraded Apple to underperform on the basis of these developments. Apple shares fell 1.5 percent to close at $308.26 on Monday. Jefferies set a price target of $263.66, about 16 percent below that closing price.

Conflicting reports have emerged, however, over whether Apple has abandoned its broader design overhaul for the iPhone's 20th anniversary.

Bloomberg, citing people familiar with the matter, reported Monday that Apple has not fully canceled its all-glass iPhone plans and is still pursuing a major glass-focused design change for next year's iPhone lineup.

According to those sources, Apple plans to apply a new glass design to next year's iPhone Pro models, internally codenamed V73 and V74. The design would feature glass covering the front and back with curved edges on the sides and a metal band running around the middle of the device.

The fully all-glass version originally envisioned by Apple's design studio has in effect been shelved, sources said. The concept — which called for finishing the entire device in glass with no metal structure — was dropped early in development due to technical challenges in seamlessly joining multiple glass panels and difficulties in mass production.

Ultimately, Apple's design ambitions for the iPhone's 20th anniversary will continue, but the company has stepped back from its most radical vision of a single-pane, metal-free glass iPhone. With the foldable iPhone also potentially launching at 3 million to 4 million won or more, the question of whether Apple's strategy of using new form factors to simultaneously raise iPhone prices and profitability will translate into higher sales has emerged as a key point to watch.