Jefferies has downgraded Apple stock to Underperform and cut its price target after analyst Edison Lee said Apple has cancelled the rumored all-glass iPhone 20 design because of low production yields. The firm sees that decision as a setback for Apple’s effort to push average iPhone selling prices higher while memory and storage costs continue to rise.
Jefferies had expected the all-glass design to become a premium feature that Apple could eventually bring to the iPhone Pro and iPhone Pro Max. Lee believes that would have helped Apple charge more for its highest-end phones and protect margins as RAM and flash storage prices remain under pressure.
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The firm now sees the rumored foldable iPhone as Apple’s main opportunity to lift average selling prices. However, Jefferies expects that device to cost more than $2,000, which would likely keep sales limited compared with Apple’s mainstream iPhone lineup.
Jefferies relies on supply chain checks
Jefferies said its view comes from supply chain checks, although Apple’s glass supply chain has not always provided a clear picture of future product plans. Apple can also keep some glass development work private because a significant portion of that work takes place in the United States.
Apple also has plenty of time before it needs to finalize an iPhone 20 enclosure. Even if the company is testing a major redesign, final hardware decisions can happen much closer to the release year.
Most previous iPhone 20 rumors have pointed toward a design closer to the iPhone Air rather than a fully glass enclosure, while reports of an all-glass iPhone have circulated for years without strong confirmation.
Wall Street remains more positive on Apple
CNBC reported that Jefferies remains one of only three firms with an Underperform rating on Apple. Among 47 firms covering the company, 10 have Strong Buy ratings, 20 have Buy ratings, 14 have Hold ratings, and none currently rate Apple as a Sell.
Apple shares closed Friday at $313.33 and were around $310 before trading opened on August 10. The broader Wall Street consensus price target stands at about $319.48, while the highest target reaches $400, showing that most analysts remain more optimistic about Apple than Jefferies.
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