Key Takeaways Jefferies downgraded Apple to Underperform with a reduced price target of $263.66 from $285.56 Sources indicate Apple abandoned its all-glass iPhone initiative because of insuff
Shares of Apple (AAPL) retreated by approximately 1.9% during Monday’s trading session after investment firm Jefferies issued a downgrade to Underperform from Hold, simultaneously reducing its price objective to $263.66 from the previous $285.56. The revised target suggests potential downside of roughly 16% from the prior Friday’s closing price and ranks among Wall Street’s most bearish projections.
The rating cut hinges on a singular critical issue: analyst Edison Lee from Jefferies contends that Apple has discreetly terminated its ambitious all-glass iPhone initiative.
The initiative had reportedly been under development since 2025 at minimum and was anticipated to launch in September 2027, strategically positioned to commemorate the iPhone’s two-decade milestone. According to Jefferies’ calculations, this premium device would have commanded a blended retail price point of approximately $2,060.
While Apple never officially acknowledged the initiative publicly, the tech giant did submit a patent application for a “six-sided glass enclosure” dating back to 2019.
Based on Lee’s supply chain intelligence, the project has been abandoned primarily due to inadequate manufacturing yields. Low yield rates indicate an excessive number of defective units emerging from production lines, rendering large-scale manufacturing financially impractical.
Lee characterized the project termination as “a major setback to efforts to bring in higher-priced iPhones” amid rising memory component costs. The strategic vision, according to his analysis, involved implementing the all-glass architecture across upcoming iPhone Pro and Pro Max variants to elevate average selling prices and profit margins.
Following the elimination of the all-glass variant from product roadmaps, Jefferies adjusted its compound annual growth rate projection for iPhone average selling prices downward from 9.0% to 6.8% spanning fiscal years 2026 through 2031. The investment firm additionally revised its earnings per share forecasts lower, reducing fiscal 2028 estimates by 2.1% and fiscal 2029 projections by 3.4%.
Lee currently identifies the foldable iPhone as “the only key driver of higher ASP and margin” moving forward. The anticipated iPhone 18 Fold is projected to carry a starting price of $2,199 for the 256GB configuration, escalating to $3,099 for the 2TB variant. Jefferies anticipates shipments of 14 million units for this foldable device during fiscal 2028.
The research note additionally expressed reservations regarding Apple’s artificial intelligence strategy. Lee indicated that the gradual deployment of Apple Intelligence complicates the company’s rationale for incorporating additional memory into smartphone models.
Supply chain intelligence gathered by Jefferies reveals Apple intends to increase DRAM capacity in the iPhone 19 Pro Max to 16GB from 12GB, though exclusively for that particular model. Should memory pricing escalate beyond current expectations during fiscal 2027, Lee cautioned that Apple might eliminate this enhancement altogether. Every additional 4GB of DRAM contributes approximately $60-70 to manufacturing costs.
The analyst further addressed recent modifications to trade-in valuations that generated speculation regarding iPhone 17 pricing strategies. Although Apple elevated trade-in values for iPhone 15 and 16 models across certain markets, the company simultaneously reduced trade-in pricing for iPhone 16 Pro and Pro Max in China by 5% and 2% respectively.
Prior to Monday’s session, Apple stock had appreciated more than 15% during 2026. That upward momentum had already experienced a setback the previous month when fiscal third-quarter financial results triggered a significant selloff, erasing $359 billion in market capitalization.
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