Apple (AAPL.US) all-glass 20th anniversary iPhone “Rashomon”: Jefferies just said it had been canceled, and people familiar with the matter quickly retorted that it was still progressing according to plan

The Zhitong Finance App learned that just before Apple (AAPL.US) is about to release the iPhone 18 series in September and the new CEO John Ternus (John Ternus) will officially take over on September 1, a fierce clash broke out between Wall Street and Silicon Valley over Apple's future product strategy. On August 10, Jefferies analyst Edison Lee rarely downgraded Apple's rating to “outperforming the market” on the grounds that “supply chain surveys showed that all-glass iPhones were cancelled due to poor yield.” However, just a day later, Bloomberg quoted reports from people familiar with the matter to clearly refute: Apple's product roadmap has not changed, and the glass-based 20th anniversary iPhone will still be launched in 2027 as planned.

2027 is of special strategic importance to Apple — the iPhone will be celebrating its 20th anniversary. Ten years ago, on the occasion of the 10th anniversary, Apple skipped the iPhone 9 and directly launched the landmark iPhone X, completely reshaping the product with a full screen and Face ID.

Jefferies's “pessimistic script”: the all-glass iPhone died due to poor yield

Jefferies analyst Edison Lee dropped a bombshell in Monday's report. Citing a supply chain survey, he pointed out that Apple's 20th anniversary “all-glass iPhone,” which was originally scheduled to be launched in September 2027, has been officially cancelled due to “too low production yield.”

The cancelled device originally carried the ultimate vision of Jony Ive, Apple's former chief design officer — to make the smartphone look like it was made of a whole piece of glass. Jefferies estimates that the device's average mixed retail price (ASP) could have reached $2,060, far higher than the iPhone 17 Pro Max starting price of $1,199.

The consequences of canceling the all-glass iPhone were, in Jeffrey's view, “a major setback.” The analysts' logical chain is clear and cruel:

First, the high-end price increase path is blocked. Apple's long-term plan is to “extend the all-glass design to future iPhone Pro and Pro Max series, further boosting average sales prices and profit margins.” Cancelling this plan means that it is far more difficult for Apple to raise the average price of the iPhone through the new model than expected.

Second, folding screens make it difficult to carry a big flag. After the cancellation of the all-glass model, the folding screen iPhone became “the only key driving the increase in average sales price and profit margin.” However, Lee believes that the folding screen will probably still be a “niche product”. The starting price of the 256GB version is expected to be $2,199, and the maximum configuration can reach $3,099. He expects sales of only about 14 million units in FY2028, making it difficult to support Apple's overall high-end strategy.

Based on this judgment, Jefferies downgraded Apple's rating from “holding” to “underperforming the market,” and the target price was drastically lowered from $285.56 to $263.66, implying a downside of about 16%. The bank also lowered the average iPhone sales price CAGR forecast for the 2026-2031 fiscal year from 9.0% to 6.8%, and lowered its earnings per share forecast for the 2028 and 2029 fiscal years by 2.1% and 3.4%, respectively.

An “optimistic counterattack” from people familiar with the matter: the roadmap has not changed, the design has been compromised

However, the Jefferies report survived for less than 24 hours. On August 11, the media quoted reports from people familiar with the matter to clearly refute the claim that the all-glass iPhone had been cancelled. According to the report, Apple “is expected to launch the iPhone Pro model next year, with a new glass-textured appearance.” People familiar with the matter stressed: “Apple's product roadmap has not changed.”

The two new iPhone Pro models are internally codenamed V73 and V74, respectively. The front and back are made of glass, and the material will be curved to both sides of the fuselage, with a metal middle frame in the middle.

However, the report also revealed the root cause of this controversy — Apple's design did experience compromises. Apple Design Studio pushed for a more idealized version, using more glass than metal, but that was abandoned early on. When adopting this design, Apple had problems connecting to glass panels, and when it was necessary to solve large-scale production problems, the solution was unsustainable.

This means that the all-glass iPhone has not been “canceled,” but has been downgraded from an aggressive solution of “a whole piece of glass” to a viable solution of “glass curved to both sides of the fuselage with a metal frame in the middle.” Apple is using engineering compromises in exchange for design breakthroughs — a script often seen in the history of Apple product development.

The design of a new iPhone is usually finalized about a year before the product is released in the fall of each year. This means that the 2027 design plan has entered the late-stage testing phase and is largely finalized—unless there are unforeseen unforeseen circumstances.

However, Apple Design Studio promoted a more aggressive version — using more glass and less metal — but the plan was abandoned in the early stages. Reasons include: Apple is experiencing technical problems connecting to glass panels, and the design is unable to meet large-scale mass production requirements. This also explains the subtle difference between “full glass” and “glass as the main body” — Apple is not abandoning the major facelift of the glass material, but rather the unrealistic “all glass without splicing” version.

Strategic dilemma: soaring memory costs and the “dilemma” of the high-end route

Regardless of the final shape of the all-glass iPhone, this debate points to the core strategic conflict Apple is currently facing.

The cost of memory is skyrocketing. Morgan Stanley analyst Erik Woodring estimates that the average cost of Apple DRAM is expected to rise by about 370% between fiscal year 2025 and fiscal year 2027. Apple has recently raised the price of Macs and iPads as a result, and CEO Tim Cook said the price increase was “inevitable.” The possibility of an overall price increase of $200 for the upcoming iPhone 18 series is constantly rising.

Jefferies supply chain research shows that each additional 4GB of DRAM will increase the iPhone's material costs by $60 to $70. The iPhone 19 Pro Max's DRAM memory plan was raised from 12GB to 16GB, but only for this model — this itself is a direct reflection of the cost pressure.

“Apple Intelligence” (Apple Intelligence) breakthroughs are still limited — another core basis for Jefferies to downgrade the rating. If AI fails to become the core driving force driving the switching cycle, Apple will have to make a difficult choice between “hardware price increases” and “sales pressure.”

The first major test of the Turners era

The “one piece of glass” debate comes at a critical moment in Apple's transfer of power. On September 1, John Turners, a hardware engineer, will officially replace Tim Cook as CEO. The promotion and compromise of the all-glass iPhone will be the epitome of Turners' first major product decision after taking office.

For investors, this “Rashomon” event revealed a core fact: Apple's high-end strategy is facing unprecedented engineering and cost challenges. The all-glass iPhone — whether “cancelled” or “compromised” — shows that the path to maintaining product premiums through revolutionary design is more difficult than expected in a context where memory costs are soaring and AI features have yet to detonate the need for switches.