Jefferies cuts Apple to sell, cites cancelled all‑glass iPhone

Apple shares fell 1.5% to $308.26 as Jefferies downgraded the stock to “underperform,” its sell‑equivalent rating, and cut the price target to $263.66, implying roughly 16% downside from the Friday close of $313.33【1】. The downgrade hinges on Jefferies’ supply‑chain checks that indicate Apple has cancelled the all‑glass iPhone slated for the 20th anniversary in 2027, a move that threatens the company’s ability to lift average selling prices (ASP) amid soaring memory component costs.

Why the downgrade matters

Jefferies analyst Edison Lee wrote that the all‑glass redesign “has been cancelled due to low yield,” removing a key lever Apple has used for a decade to raise ASPs. The firm trimmed its projected ASP CAGR for iPhones from 9% to 6.8% for fiscal 2026‑2031 and shaved EPS estimates for FY 2028 and FY 2029 by about 2‑3%【1】. With the design off the table, Jefferies sees the upcoming foldable iPhone—expected in September 2026—as the sole near‑term margin driver, estimating a starting price of $2,199 for a 256 GB model and up to $3,099 for a 2 TB version【1】. Those price points are comparable to high‑end laptops, underscoring the pressure to extract margin from hardware pricing alone.

Memory cost pressure and competitive context

The downgrade also cites “surging memory prices” as a core concern. Apple has already raised prices on Macs and iPads as DRAM shortages, driven by AI data‑center demand, push component costs higher【2】. Jefferies notes that memory cost inflation could limit the foldable’s ability to boost overall ASP across the iPhone lineup. The bank’s view aligns with broader market sentiment: at least six analysts now carry sell‑equivalent ratings on Apple, a level not seen since 2012 after Steve Jobs’ death【2】. Competing firms are also feeling the memory squeeze, with Apple reportedly testing Chinese‑made chips to diversify supply—a move that could attract regulatory scrutiny【2】.

Leadership transition adds uncertainty

The downgrade arrives as Apple prepares a leadership handoff; veteran John Ternus is set to replace Tim Cook as CEO next month【1】. The transition coincides with the upcoming September iPhone event, where the foldable is expected to debut. Investors will watch how the new CEO balances product innovation, pricing strategy, and the mounting cost pressures that Jefferies highlights.

What to watch

• Foldable iPhone launch – slated for September 2026; pricing and margin contribution will be key.
• Apple’s next earnings report – guidance on iPhone ASP and memory cost impact will test Jefferies’ assumptions.
• Supply‑chain developments – any progress on alternative memory sources or resolution of the DRAM shortage could alter margin outlook.

The downgrade underscores a pivotal moment for Apple: without the all‑glass redesign, the company must rely on a high‑priced foldable to sustain ASP growth, while memory cost inflation threatens to erode hardware margins. How the new CEO navigates these challenges will shape Apple’s profitability trajectory in the coming years.