Apple plans thinner, foldable iPhones to revive growth

Starting next year, Apple plans to introduce an iPhone that will be thinner than the roughly 8-millimeter profile of current models, people familiar with the company’s plans said. The model is intended to be cheaper than Pro models, with a simplified camera system to reduce costs.

The company is also planning two foldable devices, the people said. A larger device, intended to function as a laptop, would have a screen that unfolds to be almost as large as some desktop monitors at around 19 inches. A smaller model would fold out to a screen size that would be larger than an iPhone 16 Pro Max, meant to function as a foldable iPhone, the people said.

Both foldable designs have been in development for years, but some key parts weren’t ready. Major challenges included improving the hinge, a mechanism that allows the device to fold and unfold, and the display cover, a flexible material that protects the foldable display.

The current foldable phones on the market are not thin, light or energy efficient enough to meet Apple’s standards, which is why Apple has been slower to enter this segment, said Jeff Pu, an analyst at the Hong Kong-based brokerage Haitong International Securities.

Apple experimented with other different designs, such as having a screen on the outside of the device when folded, but it now prefers an inward-folding design, people familiar with the devices said.

Although Apple originally intended to introduce the larger device first to gauge market reaction, it now appears that the foldable iPhone is likely to be ready ahead of it. Apple executives are pushing for a 2026 release, but the company may need another year to resolve technical challenges, the people said. As for the ultra-thin phone, it would offer an alternative to consumers who like a slim-looking device and don’t mind giving up some features available in Pro models.

An Apple spokesman declined to comment.

The company is hungry to find new ways to accelerate growth. The iPhone business, which still accounts for about half of total revenue, is in a sales slump, with its fiscal 2024 revenue growing less than 1%. The last big wave of sales gains was in 2021, when carriers subsidized iPhone purchases to support their burgeoning 5G network infrastructure.

Ming-Chi Kuo, an analyst at TF International Securities, is among the first group of analysts to predict the arrival of the new devices. He said Apple executives have been pushing for the fresh designs to come faster. “I feel like things will ultimately go according to their plans,” he said.

While the updates aren’t major breakthroughs—many competitors already make foldable devices—they represent more significant changes in form and function than the company has made in years. In recent years, Apple’s core product lineup has seen relatively minor updates, including faster chips and better cameras, but they haven’t been enough to encourage users to upgrade their devices at the same pace as in previous years.

The last major iPhone redesign occurred with the iPhone X, which came out in 2017, said Cliff Maldonado, principal analyst at BayStreet Research, which studies the smartphone market.

For the recently released iPhone 16 series, the company has focused its marketing on Apple Intelligence, its new AI system available for newer iPhone models, rather than hardware upgrades. But the new AI features are being rolled out slowly, and it’s not sure if that will be enough to revive demand. Apple Intelligence was not available when the iPhone 16 was first released in September, but arrived later in October. The next set of features, including an integration with OpenAI, arrived on Wednesday.

“Apple appears to be looking to hardware innovation to drive user upgrades,” Maldonado said. “iPhone 16 will be the last of the boring aesthetic phones.”

Foldable devices have proven to be a difficult product to sell for competitors such as Samsung Electronics and Huawei. The product has remained mostly a niche device, expected to make up about 1.5% of the overall smartphone market this year, according to market research firm TrendForce. The foldable smartphone category also saw its first-ever annual unit shipment decline of 1% in the third quarter, largely due to Samsung’s poor performance with its Galaxy Z Flip 6, according to Counterpoint Research.

Historically, new hardware designs have been key drivers of Apple’s sales growth. Ten years ago, Apple introduced a new phone size with the larger iPhone 6 Plus, kick-starting a wave of growth for the company at the time.

Apple is also looking to new products outside of the iPhone for growth. Earlier this year, Apple released its first step into a new type of product in nearly a decade with the Vision Pro, a $3,499 virtual reality headset that allows users to place digital objects in their physical environment. But with its high price, Vision Pro sales have been sluggish so far, and third-party app developers haven’t flocked to the platform.

Apple is planning a follow-up to the Vision Pro, but is uncertain about the exact path forward. One plan involves using the iPhone to power the headset, potentially lowering the price of the device and reducing its relatively heavy weight, people familiar with the product said. But early tests show that the iPhone chip alone may lack the processing power needed to run some applications, the people said.

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