Why Jefferies Downgraded Apple: Canceled All-Glass iPhone, Surging Memory Costs, and a Disputed Product Roadmap

However, the status of the all-glass iPhone is actively disputed. On August 11, 2026, Bloomberg's Mark Gurman reported that Apple is still pursuing a glass-focused redesign for the 20th anniversary, directly contradicting Jefferies' cancellation claim . People familiar with the matter told Bloomberg the company expects to launch iPhone Pro models next year with a new glassy look . It remains unclear whether Lee's supply-chain intelligence captured the end of the entire 20th-anniversary redesign or just a specific all-glass display component .

A '100-Year Flood' in Memory Costs

Memory chip prices are a parallel margin headwind that compounds the all-glass iPhone setback. Apple warned as early as January 2026 that rising DRAM and NAND prices were pressuring profitability, as AI data-center demand diverted memory supply away from consumer electronics . Conventional DRAM contract prices surged 93%–98% by mid-2026 . Tim Cook called it a "100-year flood" and reluctantly raised prices on Mac and iPad models by up to 20%, warning that iPhone price hikes were likely inevitable . The canceled all-glass iPhone would have helped justify those higher price points; without it, passing on memory cost increases to consumers becomes harder. Apple's CFO previously hinted that rising component costs would pressure gross margins in the latter half of 2026 .

EPS Estimate Cuts and the Foldable iPhone Strategy

As a direct result of the downgrade, Jefferies reduced its FY28 and FY29 EPS estimates by 2.1% and 3.4% respectively . Lee also flagged that trade-in incentives may be weakening future demand and that Apple's ability to sustain premium pricing is eroding . Separately, Apple is preparing a foldable iPhone with a production target of roughly 10 million units in Q4 2026 . Morgan Stanley's bull case ($378 target) hinges partly on an 89% probability of a foldable iPhone shipping before 2027 . Jefferies, however, views the foldable as an insufficient replacement for the all-glass halo product, arguing that introducing new form factors to drive higher ASP is proving more difficult than expected . The iPhone 18 Fold is expected to start at around $2,199 for the 256GB model, with the 2TB version potentially costing as much as $3,099 .

Gene Munster's Contrarian Bullish View

Venture capitalist and longtime Apple bull Gene Munster publicly defended Apple stock after the Jefferies downgrade, arguing that the market is overreacting to the all-glass iPhone news . Munster pointed to Apple's 16% year-over-year revenue growth in fiscal Q3 2026, its expanding services business, and the coming foldable iPhone as reasons to stay bullish. He remains a notable contrarian voice against the growing bearish consensus: Wall Street's average target sits at roughly $329 with a Moderate Buy consensus, versus Jefferies' lone Underperform call .

The CEO Transition: Tim Cook to John Ternus

CEO succession uncertainty is compounding the negative sentiment. Tim Cook — who has led Apple since 2011 — has publicly indicated a transition is approaching. Apple's hardware engineering chief John Ternus is widely seen as the leading internal candidate to succeed Cook, having overseen the transition to Apple Silicon and iPhone design in recent years. The impending leadership change adds a layer of uncertainty to Apple's long-term product roadmap and strategic direction. The transition timing has not been formally announced.

Bottom line: Jefferies' downgrade is driven by a confluence of factors: a canceled high-ASP flagship (though disputed by Bloomberg), surging memory costs that Apple can no longer absorb, weaker EPS growth, and leadership transition risk — all of which the firm believes will compress the stock toward $263. Gene Munster and Morgan Stanley represent the bull case, betting on foldable iPhone momentum and the resilience of Apple's installed base of over 2.5 billion active devices .