Apple Joins the Fold & Casey’s Consumer Check

SPEAKER_1 (0:00)

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Hanna Horvath (0:32)

The AI boom needs a lot more electricity and that's creating some unlikely new winners.

Dylan Lewis (0:36)

Apple shows us that the future for smartphones is foldable.

Hanna Horvath (0:39)

For Wednesday, September 9th, it's Brew Markets Daily. I'm Hanna Horvath.

Dylan Lewis (0:42)

I'm Dylan Lewis. Let's get moving and grooving.

We finally have eyes on Apple's next generation iPhone, the iPhone Duo. New CEO John Ternus showed off the product in classic Apple fashion this afternoon. It was very cinematic. It was a very glam keynote where the company showed off its next gen iPhone 18, updates to the Apple Watch and AirPods lines, new AI functionality and also the new chips powering the phones. After an hour, much like my introduction there, he got to what people actually wanted to hear about Hanna and he hit that classic Apple line. One more thing showed off the update, a foldable design, the first that we have seen from Apple.

Opened up, it has a 7.6 inch display. When folded, it has a screen that is still 90% of an iPhone 18 Pro. The one key detail they left out, price. Expectations are around $2,000 for the device. Are you interested in a foldable iPhone?

Hanna Horvath (1:44)

I personally don't know if I'm ready to spend $2,000 on a new phone. I think somebody else has to test that crease out for a few months first.

Dylan Lewis (1:51)

I think it's the same for me. My hunch is that a lot of consumers are going to feel that way, but there will be some early adopters. And I think on some level, that's kind of what Apple is banking for here. It's important to remember, as much as Tim Cook and company have tried to move away from the iPhone, they have built out service lines, they've built out ancillary products. The iPhone is still the star when it comes to Apple. It's half of the company's overall revenue. Strategically, it is how most consumers wind up in the Apple ecosystem to start. And so I think Apple needs to be responsive to any potential shifts in the smartphone market. We have seen rumors of the foldable phone from Apple for a while. That's because foldable phones have existed for an incredibly long time. They've been out for over five years. Right now, they only account for 2% of the smartphone market. Most of those sales are coming from Samsung here in the US and Huawei in China.

It's interesting because that small market share signals, it has not been enough to get a lot of people to move from iOS over to Android, but Apple's bet might be enough to get people within the Apple ecosystem to step up in price. This new device retails for $2,000 is a massive step up from the pro models, which are typically $1,100 to $1,500.

For Apple, really, this feels like something where they can deliver a new form factor. The market's been waiting for it for a while and also give an upmarket offering for people that are willing to spend that money.

Hanna Horvath (3:08)

Yeah, this feels like kind of a typical move from Apple. They're rarely the first company into a completely new category. They tend to kind of let everybody else do the experimenting, figure out what consumers are actually interested in, and then they'll kind of come in with a version that is more polished and design-led and just oftentimes very beautiful.

But I think there's an important distinction here between something being new for Apple and something being new for the consumers. As you just said, a foldable phone is not a new idea, but it is a very meaningful change for Apple and for the iPhone, which has looked pretty similar for the past couple years. I think kind of the big question in my eyes is whether Apple can do what it has done before, which is take something that is more niche and make a bunch of people suddenly love it and want to buy it.

Dylan Lewis (3:51)

All right. In a moment, we're going to get into why fintechs want to be banks. But first, this episode is brought to you by Charles Schwab.

Hanna Horvath (3:56)

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