Apple Explores Foldable iPhone Production Amid Strategic Supply Chain Shift

Apple Initiates Foldable iPhone Test Production, Eyes Major Manufacturing Shift

Apple Inc. (NASDAQ: AAPL) is reportedly embarking on a significant strategic endeavor, commencing test production for a foldable iPhone in Taiwan. This move signals a potential expansion into a new product category while simultaneously underscoring a broader, accelerated diversification of its global manufacturing operations away from China.

The Event in Detail: Foldable Ambitions and Production Targets

Sources indicate that Apple is in discussions with its suppliers to establish a pilot production line for a foldable iPhone in Taiwan. Should these initial trials prove successful, the company aims to scale mass production in India by 2026. This aggressive timeline includes a plan to ship approximately 25 million units of foldable iPhones by 2027, anticipating robust demand for the innovative form factor.

Concurrently, Apple has set ambitious production targets for its overall iPhone lineup, projecting the manufacture of around 95 million units for its 2026 portfolio. This represents a substantial increase, exceeding 10% over its 2025 production forecasts. This significant ramp-up in anticipated output highlights Apple's confidence in its future product pipeline and market demand.

Beyond product innovation, this development is intrinsically linked to Apple's strategic imperative to accelerate the shift of its new product development and manufacturing away from China. This strategy is primarily driven by the ongoing geopolitical tensions between Beijing and Washington, as well as between China and India, which have prompted the tech giant to enhance its operational resilience by leveraging the engineering capabilities of Taiwanese suppliers and establishing large-scale production in India.

Market Reaction and Analyst Assessments

Investor sentiment surrounding Apple's strategic moves appears largely bullish, fueled by the prospect of a new product category and enhanced supply chain stability. AAPL closed at approximately $238.99. A consensus of 42 analysts has set a one-year average target price for Apple at $243.48, suggesting a modest upside of 1.88% from its current trading level. Individual projections vary significantly, ranging from a low of $175.00 to a high of $305.00.

Furthermore, feedback from 50 brokerage firms places Apple Inc. firmly in the "Outperform" category, with an average brokerage recommendation of 2.1 on a scale where 1 denotes a Strong Buy and 5 represents a Sell. However, not all analyses are uniformly optimistic; GuruFocus estimates Apple's GF Value at $223.94 for the coming year, indicating a potential downside of 6.3% from its current price, based on historical multiples and projected performance metrics. Despite this, some analysts maintain a strongly bullish stance, predicting the stock could rally by over 28%.

Broader Context: Foldable Market Dynamics and Geopolitical Supply Chain Shifts

Apple's entry into the foldable market comes as the U.S. smartphone landscape experiences a notable shift. While traditional smartphones still dominate, foldable devices are rapidly gaining traction, projecting a robust 30.59% Compound Annual Growth Rate (CAGR) through 2030. The global foldable market is forecast to surge from $31.3 billion in 2025 to an estimated $118.87 billion by 2030.

Historically, Samsung has been the undisputed leader in this nascent segment. In 2025, Samsung's foldables, though comprising only 4% of its total smartphone sales, contributed a significant 16% of its revenue from devices priced above $800, demonstrating high profitability with contribution margins estimated between 53–58%. Apple's anticipated "iPhone Fold," with a projected price range of $1,800-$2,400, aims to capitalize on a late-mover advantage, leveraging its robust ecosystem and technological refinements to disrupt Samsung's established market position.

The strategic shift in manufacturing away from China is a critical element of Apple's long-term strategy. The company absorbed approximately $800 million in tariff-related expenses in the third quarter of 2025, with projections indicating a staggering $1.1 billion impact in the current quarter, directly impacting its product gross margins. This has prompted Apple to aggressively diversify its production base, particularly towards India and Vietnam. Manufacturing iPhones in India is reportedly 5-8% more expensive than in China, and this diversification effort necessitates billions in investment.

This shift creates clear winners and losers within the global supply chain:

• Winners: India and Vietnam are emerging as significant beneficiaries, attracting substantial investments. Key partners like Tata Group, Foxconn (TWSE: 2317), and Pegatron (TWSE: 4938) are expanding their operations in these regions. Mexico is also noted as a potential near-shoring destination.
• Losers: China faces a significant challenge to its manufacturing dominance, potentially leading to economic slowdowns in regions heavily reliant on tech production. Apple itself faces increased operational costs and complexities in the short to medium term. Chinese supply chain partners who cannot adapt or diversify may see reduced orders.

Expert Commentary and Future Outlook

Analysts continue to monitor these strategic developments closely. JPMorgan analyst Samik Chatterjee has noted that demand for the latest iPhone 17 series is modestly outperforming its predecessor, the iPhone 16, suggesting continued consumer appetite for Apple's core products. While the overall analyst consensus for AAPL remains positive, recent individual analyst actions, such as downgrades by Gil Luria of DA Davidson and Helena Wang of Phillip Securities, highlight a nuanced perspective on the stock's near-term trajectory amidst significant strategic transitions.

Looking ahead, the successful launch and market acceptance of the foldable iPhone will be pivotal in establishing a new revenue stream and reinforcing Apple's premium market leadership. The effectiveness of its supply chain diversification strategy in mitigating geopolitical risks and enhancing operational resilience will also be a key determinant of its long-term stability and profitability. Investors will closely watch the progress of test production, the efficiency of scaling operations in India, and how Apple's foldable offering competes within an increasingly competitive segment dominated by players like Samsung.