Apple Faces Investor Skepticism Over Foldable iPhone Prospects

Apple finds itself navigating unusual territory as concerns mount about potentially inflated investor expectations. While the iPhone 17 is performing better than anticipated, market experts are cautioning against over-optimism regarding the company’s planned foldable smartphone. The technology giant received a rare bearish rating on Friday when investment bank Jefferies downgraded Apple shares from “Hold” to “Underperform”—a notable contrast to the prevailing sea of buy recommendations.

Analyst Downgrade Highlights Valuation Concerns

Jefferies analyst Edison Lee justified the downgrade with a clear argument: current success of the iPhone 17, partially driven by price reductions on the base model, has already sparked unrealistic hopes for the iPhone 18 Fold. The foldable device, expected in 2026, may struggle to meet these heightened market expectations.

“The improved demand for iPhone 17 is already priced into the stock,” Lee cautioned. Jefferies reduced its price target to $205.16, representing a potential decline of approximately 20 percent from current levels. Among the 51 analysts covering Apple, only 18 currently recommend selling or holding the stock, while 33 maintain buy ratings.

Market Realities Challenge Foldable Ambitions

The core issue lies in the practical limitations of the foldable market. Lee estimates Apple’s iPhone 18 Fold will achieve only 12.5 million units annually—significantly below implied market expectations. For context, Samsung’s Galaxy Z Fold 7, featuring nearly crease-free display technology, sells only about 3 million units per year despite its $2,000 price tag.

Should investors sell immediately? Or is it worth buying Apple?

Industry-wide challenges compound Apple’s situation. Without genuine technological breakthroughs, price-driven replacement cycles could create margin pressure. Lee criticized the broader smartphone sector for its structural slowdown, noting “there are no innovative features that your current phone cannot already do.”

Mixed Market Response Reflects Investor Uncertainty

Despite initial weakness following the Jefferies report, Apple shares demonstrated resilience on Friday, recovering to close 0.5 percent higher. This mixed market reaction underscores investor ambivalence: balancing concerns about excessive foldable expectations against confidence in Apple’s ability to navigate challenging market conditions.

All eyes now turn to October 30, when Apple will release its quarterly earnings. This announcement represents a crucial milestone for the stock’s future trajectory, with investors eagerly awaiting signals about iPhone 17 demand and preliminary indications regarding the foldable device timeline.