Jefferies downgraded Apple Inc. stock on Monday after supply-chain checks indicated the company canceled a planned all-glass iPhone [1].
The move signals potential difficulties for Apple to justify higher device prices as component costs rise, threatening the company's premium hardware strategy.
Jefferies shifted its rating to Underperform or Sell [1, 4] and set a price target of $263.66 [2]. Apple shares fell about two% following the announcement [3]. The firm said its decision was based on evidence from the supply chain suggesting that the all-glass design, which was intended to be a centerpiece of the product lineup, will not debut as expected.
Analysts at Jefferies said the cancellation was a "major setback" [3]. The all-glass project was viewed by some as a key driver for the 20th anniversary of the iPhone, which would have allowed Apple to push price ceilings higher through a significant aesthetic and structural redesign.
Rising costs for components have put pressure on Apple to maintain margins while continuing to attract luxury buyers. Without the all-glass model to serve as a high-priced anchor, Jefferies said the company may struggle to maintain its current growth trajectory in the hardware sector [1].
Apple has not officially commented on the status of the all-glass project or the rating change. However, other analysts have offered differing views; Gene Munster said that the next 12 months could still be strong for the company despite the setback [3].
“Jefferies shifted its rating to Underperform or Sell”
The downgrade reflects a growing concern among analysts regarding Apple's innovation cycle. If the company cannot introduce high-margin, visually distinct hardware to justify price increases, it may face stagnating average selling prices (ASP) amidst rising manufacturing costs.
