Apple is on the verge of unveiling its first foldable iPhone, a device that Morgan Stanley estimates could generate $14 billion in quarterly revenue. Yet, despite the bullish numbers, some on Wall Street are bracing for a potential sell-the-news reaction, as steep price increases could test consumer demand.
Morgan Stanley's $14 Billion Bet
Morgan Stanley analyst Erik Woodring has dubbed the foldable iPhone "the biggest iPhone form-factor change since iPhone X." The bank projects Apple will ship approximately 6.5 million units in the December quarter, contributing around $14 billion—or 16% of total iPhone revenue. Over the first product cycle, Apple could build as many as 20 million units, with initial demand likely to outpace supply.
The financial impact is amplified by the device's premium pricing. Morgan Stanley models the 512GB version at roughly $2,399, while a 2TB model could reach $3,199. That means Apple doesn't need to sell hundreds of millions of units to see a meaningful revenue boost—a relatively small cohort of premium buyers could generate billions in additional sales, given each unit costs more than twice as much as a standard flagship.
The Sticker Shock Risk
However, the foldable arrives at a time when Apple is grappling with higher memory costs. AI data-center demand has driven up DRAM and NAND prices, forcing smartphone makers to either absorb the cost or pass it on to consumers. KeyBanc Capital Markets sees this as a negative catalyst, warning that broad price increases could trigger "sticker shock" and dampen unit volumes. The firm maintains an Underweight rating and a $250 price target.
Morgan Stanley also expects Pro-model prices to rise by more than $200 year-over-year, making the September 9 launch a critical test of demand elasticity. Apple shares have climbed nearly 20% this year, closing at $319.97 on September 4, leaving investors with high expectations already baked into the valuation. If prices surprise to the upside but demand forecasts don't follow, the event could quickly turn into a sell-the-news moment.
Premium Buyers as a Buffer
On the bullish side, Apple's loyal, affluent customer base may be better positioned to absorb price hikes. Citi analyst Asiya Merchant argues that Apple should remain "one of the most resilient vendors through the downturn," citing its premium positioning, financing options, and component access. This resilience is crucial because the foldable is a halo product—it doesn't need massive volumes if it lifts average selling prices and strengthens the ecosystem.
IDC projects Apple will ship more than 17 million foldable iPhones by 2027, capturing roughly 40% of the foldable market. The research firm also expects the category to generate over $45 billion in value for Apple by then. For context, Apple's upcoming event is set to showcase not just the foldable but also the iPhone 18 Pro and AI features, underscoring the company's push into new form factors.
Still, the launch is as much a test of expectations as it is of technology. Supply hurdles have already been reported, and any misstep could amplify the selloff risk. Investors will be watching closely to see if Apple can navigate the delicate balance between premium pricing and consumer demand.
This article is for informational purposes only and does not constitute financial advice.
