Apple plans thinner, foldable iPhones to revive growth

Starting next year, Apple plans to introduce an iPhone that will be thinner than the approximately 8-millimeter profile of current models, said people familiar with the company’s plans. 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 serve as a laptop, would have a screen that unfolds to be nearly as large as some desktop monitors, at about 19 inches. A smaller model would unfold to a display size that would be larger than an iPhone 16 Pro Max, intended to serve 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 protecting the foldable screen.

Current foldable phones on the market aren’t 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 with Hong Kong-based brokerage Haitong International Securities.

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

Although Apple initially aimed to introduce the larger device first to gauge market response, it now appears that the foldable iPhone will likely be ready ahead of it. Apple executives are pushing for a 2026 release, but the company may need another year to address technical challenges, the people said. As for the ultrathin phone, it would offer an alternative to consumers who like a sleek-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 around half of overall 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 with TF International Securities, is among the first group of analysts predicting the coming of the new devices. He said Apple executives have pushed for the fresh designs to arrive sooner. “I feel like, in the end, things will proceed according to their plans,” he said.

While the updates aren’t major breakthroughs—many competitors already make foldable devices—they represent more significant changes to form and function than the company has made in many years. In recent years, Apple’s main product lineup has had 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 prior 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 to newer iPhone models, rather than hardware upgrades. But the new AI features are slowly being rolled out, and it isn’t certain if it will be enough to revive demand. Apple Intelligence wasn’t 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.

“It looks like Apple is looking towards hardware innovation to drive user upgrades,” Maldonado said. “The iPhone 16 will be the last of the boring aesthetic phones.”

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

Historically, new hardware designs have been key drivers for Apple 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 move into a new type of product in almost a decade with the Vision Pro, a $3,499 virtual-reality headset that enables users to place digital objects in their physical environment. But with its high price tag, Vision Pro sales have been sluggish so far, and third-party app developers haven’t flocked to the platform.

Apple is plotting a follow up to the Vision Pro but is undecided on the exact path forward. One plan involves using the iPhone to power the headset, potentially lowering the cost of the device and reducing its relatively heavy weight, people familiar with the product said. But early tests show that the iPhone chip alone might lack the processing power necessary to power some applications, the people said.