Apple’s Foldable iPhone Could Make a Whopping 64 Percent Gross Margin

Foldable iPhone could generate healthier margins than the iPhone 16, but its ridiculously high price means it will sell in significantly lower volume.

The intricate nature of mass-producing a foldable iPhone indicates that it will be costly to manufacture, leading Apple to sell it at a considerably higher price to preserve its substantial profit margins. The latest analysis delves into the projected ‘Bill of Materials’ (BOM) for the anticipated flagship model set to debut in the latter half of 2026, and to give you a clue, its estimated production cost will be only marginally lower than the U.S. price of the base iPhone 16. So, before you read the further details below, take a moment to guess what that figure might be.

According to a simulation analysis by UBS’ J. Yoon, the BOM for the foldable iPhone is projected to be $759, which is just $40 less than the retail price of an unlocked base iPhone 16 in the U.S. A key factor contributing to this high cost is that Apple is reportedly investigating various techniques to reduce or completely eliminate the visibility of the crease, a persistent issue for other manufacturers of foldable smartphones. Earlier today, Ming-Chi Kuo, an analyst at TF International Securities, noted that the Korean company Fine M-Tec will supply metal plates that will be affixed to the device’s OLED panel produced by Samsung through laser drilling.

This additional step in the manufacturing process will help ensure that, with extensive use, the elastic limit of the OLED panel does not exceed the recommended threshold, which would otherwise lead to visible creases. Another method highlighted by Ross Young, founder and CEO of Display Supply Chain Consultants (DSCC), involves using a thicker front glass that has been chemically treated. Whether Apple opts for both approaches remains uncertain, but it is anticipated that these choices will increase production costs, thereby raising the BOM figure.

Furthermore, the tipster @Jukanlosreve offers detailed insights about the analysis on X, which states that Apple could balance the increasing costs of the titanium alloy chassis, liquid metal hinge, and cellular communication by lowering the specifications of its A-series SoC, memory, and camera, resulting in an estimated retail price for the foldable iPhone between $2,000 and $2,400. Even with these compromises, the device is expected to be quite expensive, with Kuo suggesting that the smartphone could retail for somewhere between $2,000 and $2,500.

Nevertheless, at the MSRP range proposed by the UBS analyst, Apple could achieve a gross margin of 58-64 percent, surpassing the iPhone 16’s margin of 47 percent. The foldable iPhone is already speculated to launch without Face ID due to design challenges, a trade-off that potential customers may find disappointing if it materializes. However, let’s remain patient for a little longer, and we will soon discover what type of product will hit the market.