Artificial intelligence may not be the only area where Apple is branching out into new areas as it looks to get smartphone sales growing again. But iPhone users will still have to wait for serious upgrades.
Apple hasn’t released a foldable device despite having patents for the technology dating back a decade.
Apple is planning to make two foldable devices, a smaller one which would serve as an iPhone and a larger one which would function as a laptop,The Wall Street Journal reportedon Sunday, citing people familiar with the matter. Executives are pushing for a launch of the devices as soon as 2026, according to the report.
Apple didn’t immediately respond to a request for comment early on Monday. It hasn’t announced any foldable models, and typically doesn’t discuss unannounced products.
The move wouldn’t come as a total surprise. Rumors about Apple developing a foldable device have been circulating for years, with the company being granted patents on such technology as far back as 2014. However, a decade later, it hasn’t released anything like that, with the market for foldable phones instead dominated by South Korea’s Samsung Electronics and China’s Huawei Technologies.
That raises the question of why Apple is planning the move now. The answer might lie with slowing sales growth. Revenue from iPhone sales grew less than 1% to $201.18 billion in the company’s fiscal 2024 year, according to FactSet. That is projected to accelerate slightly to $207.61 billion in the current fiscal year but it is still a far cry from double-digit percentage growth of years past.
While the integration of AI onto the iPhone has helped boost Apple’s stock this year, there isn’t much evidence so far that it has driven sales, and rollout of various features has been slow.
Doubts over whether AI will deliver the hoped-for sales boost could provide an incentive to also overhaul the design of the iPhone. However, to deliver a significant increase in revenue it would have to break the broader market pattern so far, with foldable device sales projected at just 1.5% of the total smartphone market this year, according to market research firm TrendForce.
A foray into foldable devices will also test Apple’s reputation for hardware quality. Samsung had to delay the launch of the Galaxy Fold smartphone in 2019 after multiple reports of the phone breaking in premarket testing. That could present an issue for Apple. Technical issues could push the proposed 2026 launch back by a year, according to the Journal.
Apple stock was up 0.2% at $248.70 in premarket trading. It is trading at a forward price-to-earnings multiple of 41 times, well ahead of its five-year average of 30 times, according to FactSet.
That’s a valuation that suggests the market is expecting significant growth in the short-term. For now, generating cash from AI—be that via a boost to iPhone sales or services revenue—remains the crucial test for Apple stock. Foldable devices might be the cherry on top or the next big thing to rescue the company’s reputation for innovation if AI doesn’t pan out as hoped.