Apple looks to AI capabilities to drive its new foldable phone sales

Tech proudly moves fast and breaks things but is also perfectly happy to reinvent the wheel. Take Apple’s shiny new toy, which newly-minted boss John Ternus is expected to unveil on Wednesday: a foldable phone.

The devices have been available globally since 2019; Asian manufacturers of screens were producing prototypes well before that. Samsung, which pips Apple as the biggest maker of mobile phones, is on to its eighth iteration.

Still, tardiness itself needn’t be an issue for Apple. First movers don’t always win the race: some are forced out by upstarts that have learnt from pioneers’ mistakes. Apple itself has form in sitting it out to watch for — literal in the case of foldable phones — cracks in first movers’ offerings. For smartphones, think of the once ubiquitous BlackBerry.

A bigger concern is the potential cost of the device. Demand from AI data centres has pushed chip costs skyward. That is especially important for foldables, which come with more real estate and capabilities — no need, for example, to close down one page to view another — which means they require more memory and more chips. Indeed, Apple’s phone is widely expected to cost more than $2,000.

While that looks steep, foldables have always commanded big price tags. If Ternus were to pitch Apple’s device at the same level as Samsung’s first iteration back in 2019, adjusted for inflation that would come to $2,600. And novelty attracts buyers, especially when there is an appreciable upgrade in features. Samsung, launching its latest foldable series last month, sold 8 per cent more than it did for the previous generation’s launch, according to Counterpoint Research.

Not least because of its price tag, the new device has the potential to be significant for Apple’s revenue. Morgan Stanley reckons Apple could sell 6.5mn foldables in the next three months, bringing in the equivalent of 16 per cent of total iPhone sales. And the halo effect from the new foldable may allow Apple to raise prices of its other products too: indeed, analysts at Arete expect the company to add perhaps $100-$200 to the price of its iPhones in 2027, helping to cover rising component prices.

The arrival of Apple will not necessarily squeeze existing foldable manufacturers such as Huawei and Xiaomi, which launched their own newest versions on Monday. As a result of that competition and geopolitics, China — home to the biggest group of foldable users — will be the hardest for Apple to crack.

But elsewhere, diehard Apple fans and a healthy slug of hype should drive sales, and help Ternus, who comes from the hardware side of the business, prove that customers are willing to pay up for premium devices on which to run their AI.

[email protected]