Apple downgraded by Wall Street as it abandons "all-glass" model and runs out of new ideas

Apple is facing a new wave of shaken confidence from Wall Street. The rumored all-glass flagship model, said to be designed to commemorate the 20th anniversary of the iPhone, has reportedly been canceled. This news prompted Jefferies to downgrade Apple’s stock rating to “Underperform” and cut its target price to one of the lowest on Wall Street.

Jefferies analyst Edison Lee on Monday (August 10) downgraded Apple’s rating from “Hold” to “Underperform,” slashing the target price from $285.56 to $263.66, implying about 16% downside from the current price. Lee’s downgrade is based on supply chain surveys—which revealed that Apple’s all-glass iPhone, originally scheduled for September 2027, has been halted due to “insufficient production yield.” This device was expected to sharply raise iPhone’s overall average selling price and margin with an average price of around $2,060.

Lee characterized this cancellation as a major setback for Apple’s “plan to enhance profitability through high-priced models.” Meanwhile, he holds a conservative view on Apple’s slow AI strategy progress and the component cost pressures of the iPhone 19 Pro Max. On Monday, Apple’s stock fell 1.5%, underperforming the Nasdaq Composite Index’s 0.3% decline that day.

All-Glass iPhone Fails: High Pricing Strategy Blocked

According to Jefferies, Apple had planned to launch an all-glass-encased iPhone, echoing former Chief Design Officer Jony Ive’s vision of a “single piece of glass” smartphone. The project was first reported in 2025, and Apple quietly applied for a “six-sided glass enclosure” patent in 2019, but the company has never publicly commented on the related rumors.

However, Jefferies’ supply chain survey shows the project has been canceled due to “insufficient production yield”—meaning that during manufacturing, the proportion of qualified products failed to meet mass production standards. Edison Lee believes this implies “driving iPhone’s average selling price up by introducing new form factors is more difficult than expected.”

This all-glass model was scheduled to debut in September 2027, coinciding with the 20th anniversary of the iPhone, with an estimated average price of around $2,060—far higher than the $1,199 starting price of the iPhone 17 Pro Max. Lee indicated that Apple’s initial plan was to extend the all-glass feature to future Pro and Pro Max models, thereby continually boosting both average price and profit margin. The cancellation of this model now means this path to price hikes has been blocked.

With the all-glass model off the table, Lee believes the only remaining driver to push iPhone’s average price higher will be the much-anticipated foldable iPhone. Investors have high hopes for this product, with some analysts forecasting strong initial consumer demand and viewing it as an “important engine” for Apple’s growth.

However, Lee is cautious. He believes the foldable iPhone is likely to be only a “niche product,” and, due to high memory chip prices, he expects the “iPhone 18 Fold” to fall in the $2,199–$3,099 price range, depending on storage configuration. Such a high price threshold could limit its substantive contribution to overall sales and revenue.

High Memory Costs, AI Stagnation Compound Challenges

The failure of the all-glass model further narrows Apple’s flexibility to cope with rising memory costs.

According to Morgan Stanley analyst Erik Woodring’s recent report, the average cost of Apple’s DRAM is expected to increase about 370% between fiscal years 2025 and 2027, making a $200 across-the-board price hike for the iPhone 18 series increasingly likely.

This June, Apple has already raised prices for its MacBook and iPad product lines, with CEO Tim Cook characterizing such hikes as “inevitable.”

Meanwhile, Lee remains cautious regarding the advance of Apple’s AI strategy. Supply chain data indicates Apple is considering boosting the iPhone 19 Pro Max’s memory from 12GB to 16GB to support more sophisticated on-device AI models.

But Lee believes the slow rollout of Apple Intelligence makes it difficult for Apple to justify this hardware upgrade’s cost, further limiting its ability to support premium pricing through the AI narrative.

Bearish Sentiment Rises, But Majority of Analysts Maintain Buy

Jefferies’ downgrade is not an isolated case.

KeyBanc analyst Brandon Nispel downgraded Apple from “Sector Weight” to “Underweight” in July, citing that after Apple’s growth accelerates in 2025, the growth momentum has started to flatten; weak iPhone sales may drag down other hardware segments, eventually causing the stock’s valuation to appear “increasingly stretched over time.”

Apple’s stock has already experienced a notable pullback due to earnings pressure—last month’s Q3 financial report disappointed the market, leading to a subsequent sell-off that wiped $359 billion off Apple’s market cap. Nvidia took the opportunity to overtake Apple as the world’s most valuable company.

Still, Wall Street’s overall confidence in Apple remains unshaken. According to FactSet, of 51 analysts surveyed, 32 maintain a “Buy” or equivalent rating, 14 rate it a “Hold,” and only 5—including Lee and Nispel—hold negative views.

Apple’s share price is up about 34% over the past 12 months and more than 15% year to date—still slightly outperforming the broader market.