Apple's entry into the foldable smartphone market is viewed by some as a smart move into a segment that, while currently small, is growing significantly faster than the broader smartphone market.
Projections suggest the foldable segment could reach $10 billion to $20 billion in revenue in the near term, potentially accounting for 5% to 10% of Apple's total iPhone revenue within the first year.
Substitution problem
Scepticism persists over the device's actual financial impact, largely due to what analysts call the "substitution effect", where buyers of the foldable would likely have purchased a high-end iPhone 18 Pro or Pro Max anyway.
Foldable phones currently represent roughly 2% of the overall smartphone market, and even if that share grows to 5% among Apple's wealthier customers, the net gain may be limited by cannibalisation of existing premium sales.
Concerns about the device itself include the reported absence of Face ID, considered a defining iPhone feature, and worries the device may be perceived as too heavy.
Bull case: compounding growth
Proponents argue that despite the substitution effect and small current market size, the foldable segment's growth rate, estimated at 25% to 30% annually, offers meaningful long-term compounding potential, even though that rate is not expected to continue indefinitely.
The target demographic is not the average user, but rather people who don't work from computers, or those who prioritise entertainment over standard tablets.
The device is expected to get thinner, lighter, and gain hardware upgrades over time, including camera improvements from its current 48 megapixels toward a potential 75 megapixels in future iterations.
A Vision Pro comparison
Priced between $2,000 and over $3,000, the device carries larger profit margins despite higher production costs, and Apple is not targeting the journalist demographic specifically, expected to succeed regardless of adoption from that group.
The launch has drawn comparisons to the Apple Vision Pro, a niche product bought largely by fans to demonstrate Apple's commitment to innovation, though this device is viewed as more practical given the Vision Pro was considered ahead of its time.
Apple is entering this market because the broader smartphone market has stagnated, and foldables represent one of the only remaining growth segments, even as some remain sceptical the category will ever become genuinely large, viewing the surrounding media attention as an overreaction.
