Apple’s foldable iPhone raises a significant question: Who is its target audience for the price of $1,999?

Apple's foldable iPhone debuted on Wednesday, showcasing remarkable features and a high-end price point, beginning at $1,999 in the U.S. market. However, some attendees in the crowded room at the launch event in Cupertino, California, pondered its allure beyond affluent tech aficionados.

Apple executives showcased the iPhone Duo operating a range of applications such as Zoom, Slack, and Netflix on an expanded display, highlighting its versatility for work, content creation, and entertainment.

New Apple CEO John Ternus emphasized that the "larger display that feels as natural and intuitive as an iPad" would create opportunities for the iPhone Duo to function as a user's personal AI hub.

“Apple typically does not specify who the buyer is, but in this particular instance, they have been quite reserved about it,” stated Carolina Milanesi, an analyst at Creative Strategies.

Analysts indicate that Apple's brand prestige is sufficient to guarantee robust initial sales of the iPhone Duo. However, once the initial excitement diminishes, concerns arise regarding the device's steep cost and Apple's ambiguous understanding of its intended audience, which may limit it to a small group of affluent early adopters—a trend that has affected this category since its inception.

Foldable phones are projected to represent under 3% of the global smartphone market by 2026, as reported by research firm IDC, which anticipates minimal change in 2027, even with Apple's involvement. "Definitely there was a little bit of a lapse in positioning,” stated Neil Shah, Vice President of adopters—a president of Counterpoint Research. “From our perspective, it was unclear whether it was intended for work or leisure, but I believe the essence of the iPhone has always been its versatility as a device.”

A Matter of Intent

By opting for a broad marketing strategy, Apple failed to specify the target audience it anticipated would invest in a phone priced at $3,199 in the U.S. for the highest storage option.

When Apple co-founder Steve Jobs introduced the iPad in 2010, he positioned the tablet computer as creating a new category, serving as an enhanced device for media and entertainment consumption.

By 2015, Tim Cook, who was the CEO of Apple at the time, positioned the new Pro line of tablets as a tool for creative professionals.

The Apple Watch, originally marketed as a fashion accessory, has transformed into an essential companion for health and fitness.

Apple faced challenges at the start of 2023 with its Vision Pro augmented reality headset, which received praise from analysts for its technology but raised concerns regarding its steep price and unclear applications beyond entertainment.

PENT-UP DEMAND

Counterpoint's Shah projected that Apple would likely sell nearly 6 million units of the iPhone Duo by year-end, attributing the figure to the significant pent-up demand among current iPhone users. According to Shah, those sales would provide Apple with a quarter share of the global market.

Samsung (005930.KS), the current market leader in foldable phones, has been offering its devices since 2019, with additional options available from companies such as Alphabet's Google and China's Huawei.

Samsung successfully navigated a challenging launch, which some referred to as "Foldgate" and involved numerous reports of damaged screens and peeling components. It currently commands 40% of the market, according to Counterpoint data, and introduced a revamped passport-style foldable phone in July.

That device has surpassed its predecessors and bolstered a publicity campaign Samsung initiated in reaction to the iPhone Duo, ridiculing Apple for "reheating our leftovers.

However, the market's expansion has decelerated recently as the devices have faced challenges in appealing to a broader audience beyond a specialized group.

Apple's entry is anticipated to deliver the most significant year-over-year increase in foldable smartphone shipments since 2021, as reported by technology research firm Omdia, which has projected its 2026 market forecast at 22.3 million units.

Bob O’Donnell, chief analyst at TECHnalysis Research, noted that the high price of the iPhone Duo limited its potential audience, particularly among younger consumers, though loyal Apple fans would support initial sales.

“It will be something that people will desire,” he said. “It will serve as a status symbol for some time, as I believe it will be difficult to obtain.”