Key Highlights
- Jefferies downgraded Apple to Underperform with a reduced price target of $263.66 from $285.56
- Reports from supply chain sources indicate Apple abandoned the all-glass iPhone project due to manufacturing yield problems
- The discontinued device was slated for a September 2027 release with an estimated price tag of $2,060
- The firm reduced its iPhone average selling price growth projection from 9.0% to 6.8% for the 2026-2031 period
- Shares of Apple declined approximately 1.9% following Monday’s analyst downgrade
Shares of Apple (AAPL) retreated approximately 1.9% during Monday’s trading session after investment firm Jefferies issued an Underperform rating on the technology giant, reducing its price objective to $263.66 from a previous $285.56. The revised target suggests potential downside of roughly 16% from the previous Friday’s closing price and represents one of Wall Street’s most bearish projections for the iPhone maker.
The negative rating revision hinges primarily on a single critical issue: Jefferies analyst Edison Lee contends that Apple has discreetly terminated development of its ambitious all-glass iPhone initiative.
Development work on the innovative handset had been underway since no later than 2025, with industry observers anticipating a launch date of September 2027 to coincide with the iPhone franchise’s two-decade milestone. According to Jefferies’ analysis, the device would have commanded an average retail price point of approximately $2,060.
While Apple maintained official silence about the initiative, the Cupertino-based company did submit patent documentation for a “six-sided glass enclosure” design in 2019.
Based on Lee’s intelligence gathered from industry supply chain sources, the program has been discontinued because of inadequate production yield rates. Insufficient yield indicates an excessive number of manufactured units contain defects, rendering large-scale commercial production financially unsustainable.
Lee characterized the project’s termination as “a major setback to efforts to bring in higher-priced iPhones” amid escalating memory component expenses. The strategic objective, according to his assessment, involved deploying the all-glass construction methodology across subsequent iPhone Pro and Pro Max iterations to elevate average transaction values and profit margins.
Reduced Average Selling Price Projections
Following the elimination of the all-glass variant from Apple’s product roadmap, Jefferies decreased its compound annual growth rate projection for iPhone average selling prices from 9.0% to 6.8% spanning fiscal years 2026 through 2031. The research firm simultaneously reduced its earnings per share forecasts, lowering fiscal 2028 estimates by 2.1% and fiscal 2029 projections by 3.4%.
Lee now identifies the foldable iPhone as “the only key driver of higher ASP and margin” in Apple’s future product pipeline. The anticipated iPhone 18 Fold is expected to debut at $2,199 for the base 256GB configuration, escalating to $3,099 for the premium 2TB variant. Jefferies anticipates sales volume of 14 million units for this foldable device during fiscal 2028.
Apple Intelligence Development Scrutinized
The analyst’s research note also adopted a reserved stance regarding Apple’s artificial intelligence strategy. Lee suggested the gradual deployment of Apple Intelligence features creates obstacles for justifying increased memory specifications in smartphone models.
Supply chain intelligence gathered by Jefferies indicates Apple intends to expand DRAM capacity in the iPhone 19 Pro Max to 16GB from the current 12GB, though exclusively for that particular model. Should memory component pricing escalate beyond current projections during fiscal 2027, Lee cautioned, Apple might eliminate that enhancement altogether. Industry estimates suggest each additional 4GB of DRAM contributes approximately $60-70 to manufacturing costs.
The analyst additionally addressed recent adjustments to trade-in valuations that generated market speculation regarding iPhone 17 pricing strategies. Although Apple elevated trade-in offers for iPhone 15 and 16 models in certain territories, the company simultaneously reduced trade-in compensation for iPhone 16 Pro and Pro Max units in China by 5% and 2% respectively.
Prior to Monday’s session, Apple stock had registered gains exceeding 15% during 2026. That positive momentum had already experienced disruption last month when fiscal third-quarter financial results triggered a market selloff that eliminated $359 billion from the company’s market capitalization.
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