iPhone Foldable Version Just Got Cheaper? Ming-Chi Kuo Says It All Hinges On This For Apple In 2026
News Summary
Renowned analyst Ming-Chi Kuo suggests Apple Inc. (NASDAQ:AAPL) is closer to launching its anticipated foldable iPhone in 2026 at a lower-than-expected cost, primarily due to a significantly cheaper hinge design. He forecasts the hinge's average selling price (ASP) at mass production will be around $70-80, substantially below market expectations of $100-120 or higher. This cost reduction could either boost Apple's profit margins or lead to consumer savings. Furthermore, Apple's manufacturing partner, Foxconn (Hon Hai Precision Industry, OTC:HNHPF), has formed a joint venture with Shin Zu Shing to produce the new hinge, securing roughly 65% of the orders, while Amphenol Corp. (NYSE:APH) holds the remaining 35%. Kuo notes that Foxconn's investment aims to reinforce vertical integration and streamline the supply chain to further cut costs. Luxshare-ICT is also expected to become an additional hinge supplier after 2027, potentially driving costs down even more. Apple reportedly plans to produce around 95 million iPhones for its 2026 lineup, representing its highest output in years and over a 10% increase from 2025. JPMorgan analysts predict the device could generate up to $65 billion in new revenue by 2029. Samsung Electronics Co. (OTC:SSNLF), a leader in foldables, is collaborating with Apple on the iPhone Fold's display, having refined its own foldable devices over a six-year lead, with the Galaxy Z Fold 7 shipping an estimated 10 million units in 2024.
Background
Apple has long been rumored to be developing a foldable iPhone, but its entry into the foldable market has lagged behind key competitor Samsung. Samsung Electronics has accumulated six years of experience in this segment since launching its first Galaxy Fold in 2019, shipping approximately 10 million foldable phones in 2024 and establishing itself as a market leader. Supply chain management and cost control are central to Apple's product strategy. Foxconn and Luxshare are critical assembly partners in Apple's supply chain. Ming-Chi Kuo, a prominent Apple analyst, is widely followed due to the typically high accuracy of his predictions regarding Apple's product roadmap and supply chain. Apple is also actively pursuing a global supply chain diversification strategy, including relocating some production lines to India.
In-Depth AI Insights
Beyond cost reduction, what strategic implications does the hinge supply chain restructuring (Foxconn/Shin Zu Shing JV, Amphenol's involvement, potential Luxshare entry) hold for Apple's long-term supplier management and profitability? Foxconn's vertical integration strengthens its core position in Apple's supply chain, potentially reducing Apple's negotiation leverage in certain aspects but contributing to overall cost optimization. Introducing more competitors (like Luxshare) ensures sustained cost pressure on hinge supplies, compelling suppliers to innovate and optimize production continuously. This move signals Apple's intent to deepen supply chain diversification and de-risking, reducing reliance on single suppliers, enhancing supply resilience, and securing better pricing for critical components. Given Samsung's significant head start and established foldable market presence, how might Apple's delayed entry, even with a potentially cheaper device, impact its market penetration and profitability, especially considering its premium brand perception? Apple's delayed entry allows it to observe market reactions, learn from competitors' experiences, and iterate on technology and user experience, avoiding potential flaws of early foldable products. A lower cost could help Apple expand its user base beyond the ultra-premium segment, but success will still hinge on its ecosystem and software integration delivering unique value beyond hardware to justify its premium. Key to success will be Apple's ability to define a new foldable user experience paradigm, rather than merely following market trends, which will determine its ability to differentiate and maintain high-profit margins in an already competitive landscape. Assuming Apple meets its 2026 launch and 95 million unit shipment target for the foldable iPhone, what ripple effects could this have on the global smartphone supply chain and component manufacturers? Massive shipment volumes will spur capacity expansion across the entire supply chain, particularly driving significant demand growth for critical components like hinges, flexible displays, batteries, and new materials. Apple's large-scale entry will accelerate the maturity and cost reduction of foldable technology, prompting more brands to follow suit and further expanding the foldable smartphone market size. With Apple's entry, competition within the supply chain will intensify, with existing suppliers potentially facing stricter cost control and innovation demands, while also presenting opportunities for new entrants.