Jefferies downgrades Apple, says all-glass iPhone canceled

Jefferies on Monday downgraded Apple ↘ 0.80% to Underperform from Hold and cut its price target to $263.66 from $285.56, after supply-chain checks indicated the company has scrapped a planned all-glass iPhone that was expected to launch in September 2027. Apple shares fell in premarket trading following the call.marketwatch+1

A Blow to Apple's Premium Pricing Strategy

Analyst Edison Lee said the 20th-anniversary all-glass iPhone was abandoned due to poor production yields. The device would have carried an estimated average selling price of $2,060, far above the iPhone 17 Pro Max's $1,199 starting price. Jefferies had expected Apple to extend the all-glass design to future Pro and Pro Max models, raising ASPs and margins across the lineup.investing+2

With the device shelved, Jefferies lowered its estimated compound annual growth rate for iPhone ASP between fiscal 2026 and 2031 to 6.8% from 9.0%, and cut fiscal 2028 and 2029 EPS estimates by 2.1% and 3.4%, respectively. The foldable iPhone, expected to start at $2,199 for the 256GB model, remains "the only key driver of higher ASP and margin," though Jefferies forecasts it will be a niche product with just 14 million units sold in fiscal 2028.investing

Growing Bearishness on Wall Street

The downgrade adds to mounting skepticism. According to AppleInsider, Jefferies is now one of only three firms with an Underperform rating on Apple, though none have issued an outright sell. Bloomberg reported the move under the headline "Sell Ratings Pile Up". The consensus price target among 47 covering analysts stands at $319.48, with the highest at $400.bloomberg+1

Broader Headwinds Compound the Pressure

Beyond the glass iPhone cancellation, Jefferies flagged rising memory costs as a constraint on future hardware margins. The firm noted Apple plans to increase DRAM in the iPhone 19 Pro Max to 16GB from 12GB, but only for that model, suggesting "still-limited breakthrough in Apple Intelligence". Separately, a report that Apple is evaluating memory components from China's CXMT — pending White House approval — has introduced additional geopolitical uncertainty.tradingpedia+1

Earlier in the week, Phillip Capital also downgraded Apple shares, citing memory price inflation as a risk to gross margins. The stock remains well below its 52-week high of $344.57, still working through fallout from guidance that fell short of Wall Street expectations last quarter.tradingpedia