Apple Inc. (NASDAQ:AAPL) has just released its first foldable phone, the Duo, marking the most significant design change to an iPhone in recent years. The Duo is priced at a steep $1,999 in the United States and features a 7.6-inch inner display; its outer screen is 5.4 inches in size. It is driven by the company’s A20 Pro chip and includes a custom hinge as well as being built from titanium.
For Apple’s new CEO John Ternus, the Duo was his first major product launch since succeeding Tim Cook. Ternus called the Duo “the most transformational change to iPhone since the original.”
Apple is billing it as a hybrid of smartphone portability and tablet-like productivity with a Split View that enables users to open two apps at a time, if they want to multitask.
Bull case
Recently, Apple’s customers have shown willingness to pay more for its premium products. The company attributed the solid 22% year-over-year growth in the June quarter to higher Pro sales, which provides evidence of its premiumization strategy. Apple also disclosed that the June quarter saw a record number of upgraders for Q3 (Apple’s June quarter). That is evidence that even flat unit volume growth would translate to revenue growth as long as the average selling price of iPhones keeps increasing.
Industry analysts think that Apple will eat up a good percentage of the niche foldable smartphone market. According to TrendForce, Apple will eat up 25% of the market share in its debut year, while IDC projects that Apple could reach a market share of 40% by the end of 2027.
Also, Apple’s in-house A20 Pro chip is built to improve the iPhone’s AI performance. Apple is positioning the iPhone as an “intelligent personal hub.” If Apple is able to pick up the slack on AI features, Duo’s larger screen could support a sustainable upgrade cycle.
Bear Case
Starting at $1,999 in the US and even higher in most major markets due to tariffs, it is out of reach for most of the world’s population, with only a small percentage earning more on a monthly basis than Duo’s starting price.
Additionally, Apple is launching its foldable iPhone years after Samsung and Huawei, which have a huge head start on technology, pricing, and data on consumer habits. This is particularly pronounced in one of Apple’s major markets, China, which made up over 17% of Apple’s overall sales during the June quarter. Huawei and other Chinese makers already have a strong foothold in the domestic foldables. Chinese consumers tend to be much more price-conscious than their American counterparts.
Finally, there is an AI risk. The tech giant has been trying to repair the damage to its AI credibility after the botched Siri overhaul. If Apple’s AI does not become a meaningful upgrade driver, the company will have to depend on hardware and form factor alone to justify its premium. The lack of some of Apple’s flagship specs like Face ID and a dedicated telephoto lens compared to Apple’s other flagships like the iPhone 18 Pro line worsens the case for Duo.
Conclusion
Apple’s $1,999 foldable phone, Duo, comes at a time when Apple’s consumers have been increasingly buying premium products. A continuation of this trend could lead to solid Duo sales. However, the lofty price, the already entrenched competition, and Apple’s lack of AI development could prevent Duo from being the company’s next growth engine.
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This article is originally published at Insider Monkey.
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