Apple’s new foldable ‘Duo’ iPhone has garnered a mixed reaction from Wall Street. While praised for its design and a lower-than-expected $2,000 price point, analysts are divided on its potential market appeal, with some concerned about the limited consumer demand for foldable devices. Despite these concerns, Apple shares saw a slight increase, bucking a historical trend of post-launch stock dips.
Wall Street's reception to Apple's highly anticipated foldable iPhone, dubbed the 'Duo,' has been largely positive, though some analysts express concerns about its market appeal. The tech giant unveiled the device on Wednesday as part of its annual product refresh. Despite a slight uptick of less than 1% in early trading Thursday to nearly $318, Apple shares have historically shown a tendency to retreat or remain flat the day after major product launches, according to a Bank of America analysis.
The enthusiasm for the Duo appears to stem from its design and a surprisingly competitive starting price of approximately $2,000. Morgan Stanley analyst Erik Woodring noted that the $1,999 price point, while still substantial, came in significantly below investor expectations ranging from $2,300 to $2,500 and even undercut Samsung's Galaxy Fold7. This suggests Apple is prioritizing user adoption over immediate profit maximization.
Samik Chatterjee of JPMorgan echoed this sentiment, calling the Duo "attractively priced" and suggesting it could attract users from other foldable smartphone brands. Ben Reitzes at Melius praised the device's blend of a thin profile and robust construction. However, not all analysts share this optimism. Laura Martin of Needham pointed to the niche market for foldable phones, which currently represents only 5% of the total smartphone market, questioning broader consumer demand for this form factor.
Analyst Insights on Apple's Duo and Stock Performance:
- Bank of America: Reiterated a 'buy' rating with a price target of $370, highlighting the Duo as a significant form-factor innovation that seamlessly integrates hardware and software, potentially expanding Apple's total addressable market with iPad-like productivity enabled by its foldable screen.
- UBS: Maintained a 'neutral' rating with a price target of $296. Analyst David Vogt commented that the $100 price increase for the Pro and Pro Max models was in line with expectations, noting that a larger increase could have negatively impacted iPhone demand, especially given rising memory costs.
- Jefferies: Maintained an 'underperform' rating with a price target of $264. Edison Lee believes Apple is prioritizing volume over margins to gain supply chain bargaining power, grow its high-margin service revenue through a larger installed base, and counter rising competition in the high-end segment.
- Evercore ISI: Maintained an 'outperform' rating with a price target of $365. Amit Daryanani focused on Apple's advancements in artificial intelligence, including updates to Apple Intelligence and Siri, which offer personalized responses, automatic calendar updates, and enhanced productivity features. Major upgrades to the Camera app, such as an improved cleanup tool and advanced photo editing capabilities, were also highlighted.
- Baird: Maintained an 'outperform' rating with a price target of $330. William Power expressed confidence in the iPhone 17 cycle building on the success of the previous year, noting a re-acceleration of iPhone growth to over 20% in recent quarters, indicating a positive trend in smartphone upgrade rates.
The article also touches upon broader market trends, including the Federal Reserve's potential rate hikes and consumer inflation data, with links to related content discussing these economic factors and their impact on the stock market.
