Morgan Stanley said in a Sept. 1 iPhone 18 preview report that Apple is set to unveil its first foldable iPhone at its Sept. 9 launch event, while the Pro lineup is expected to see its biggest same-model price increase in years. The bank kept its Overweight rating on Apple and maintained a $360 price target, calling the release the most important iPhone hardware change since the iPhone X.
The report estimated that Apple will prepare 7 million to 8 million foldable iPhones in the second half of 2026. Over the first product cycle, shipments could reach 20 million units. In the December quarter alone, the device could contribute about $14 billion in revenue.
Morgan Stanley also said the event carries another layer of significance: Tim Cook will no longer serve as keynote presenter, and new CEO John Ternus will make his first appearance on stage. The bank said Apple’s stock trajectory into year-end will depend on three variables: Ternus’ performance, the foldable iPhone’s user experience, and how Apple balances higher prices with market demand.
Foldable iPhone seen as the biggest hardware shift since iPhone X
Apple is entering the foldable smartphone market seven years after Samsung, according to the report. Morgan Stanley described the move as the largest change in iPhone form factor since the iPhone X and a major test of Apple’s pricing power.
Market expectations for the foldable model’s starting price range from $2,300 to $2,500. Morgan Stanley’s base-case estimate is $2,399 for the 512GB version. It also said that every 1% increase in foldable iPhone mix within total iPhone shipments would lift average selling price by about 1.5 percentage points.
On hardware, the report said Apple made trade-offs. Face ID has been removed in favor of a fingerprint sensor. The rear camera system includes only wide and ultra-wide lenses, with no telephoto lens. At the same time, the folded device is said to be thinner than the iPhone Air, and an advanced hinge and display system largely removes the crease.
Morgan Stanley said its consumer survey showed notable interest in foldable iPhones, especially in China. It also cited feedback from Samsung’s Galaxy Z Fold 8, which starts at $1,899, as evidence that the book-style foldable format has real demand. Based on that view, the bank expects Apple’s foldable iPhone to sell out quickly, with strong demand and constrained initial supply.
2nm chip is framed as the real Pro upgrade
The report said hardware changes in the iPhone 18 Pro lineup look relatively conservative. The main upgrade, in Morgan Stanley’s view, comes from the chip.
The bank expects the iPhone 18 Pro series to be the first to use the A20 Pro application processor built on Taiwan Semiconductor Manufacturing Co.’s 2nm process. Based on TSMC data cited in the report, 2nm can improve performance by 10% to 15% at the same power level, or reduce power consumption by 25% to 30% at the same performance level.
Morgan Stanley also pointed to Apple’s newly released M6 chip, which is also built on 2nm, as a reference point. Compared with the 3nm M5, the M6 adds two “super CPU cores,” two more GPU cores, and boosts peak neural engine performance by as much as 100%. The report said the A20 Pro has already been confirmed to use WMCM packaging technology. Compared with the InFO packaging used over the past decade, WMCM offers greater design flexibility and better speed and thermal management.
According to the bank, the computing gains from 2nm chips support two Apple narratives: stronger on-device AI capabilities, specifically Siri AI, and higher product pricing.
Memory costs drive expected $200-plus price increases
Morgan Stanley said the Pro series is heading for the largest same-model price increase in years.
It estimated a starting price of $1,299 for the 256GB iPhone 18 Pro, up $200 from the $1,099 price of the iPhone 17 Pro, an 18% increase. It projected the 256GB iPhone 18 Pro Max at $1,399, also up $200 from $1,199, a 17% increase. The increase is expected to be larger for the 1TB and 2TB versions, with the 2TB Pro Max rising as much as 25%.
The report said the main driver is higher memory cost. Apple’s DRAM consumption tied to iPhone production in the first half of 2026 rose nearly 50% year over year, while NAND consumption rose more than 30%. Morgan Stanley calculated that a $200 price increase would be enough to offset rising memory costs while preserving a gross margin of about 40%.
Still, the bank said the price move is not risk-free. Consumer price sensitivity, changes in trade-in values, and the spread of installment payments will all affect demand elasticity. Based on Apple’s current supply-chain planning, the company appears more concerned about securing enough components than about finding enough buyers, the report said.
Supply is still the bottleneck, with memory the biggest uncertainty
Morgan Stanley estimated Apple’s total iPhone component procurement for 2026 at 265 million to 270 million units, up 5% to 7% year over year. Of that total, iPhone 18 Pro, Pro Max, and foldable models account for about 81 million units in second-half preparation.
The report said TSMC’s 2nm wafer orders increased modestly and were pulled forward over the past week, equivalent to an extra 2 million to 3 million iPhones in output. Morgan Stanley said it is unusual to raise supply-chain forecasts before a launch, especially when existing plans already reflect Apple’s internal bull-case scenario.
Even so, memory supply remains the largest unknown. If Apple fully executes its current build plan, DRAM consumption in the second half of 2026 would rise about 15% year over year, while NAND use would rise about 25%. With the consumer memory market already tight, the bank described that as an aggressive target. It has not yet incorporated the recent wafer-order increase into its iPhone shipment forecast and said post-launch sales data will be needed for confirmation.
Ternus debut, rating, and risk factors
The Sept. 9 event also matters as a management transition story. The report said new CEO John Ternus will make his first public debut in Apple’s spotlight era after Tim Cook steps away from the lead presenter role.
Morgan Stanley maintained its Overweight rating and $360 price target on Apple, based on about 35 times fiscal 2027 earnings per share of $10.30. The bank said a long iPhone replacement cycle, a global rollout of AI features, and a new hardware form factor could drive faster iPhone growth.
It listed upside risks as better-than-expected iPhone 18 performance, stronger-than-expected Apple Intelligence adoption, new product-line launches, and renewed acceleration in services growth. Downside risks include weak consumer spending that limits upgrade rates, higher memory costs, slow AI feature progress, geopolitical tension, and tighter App Store regulation.
Morgan Stanley said it will watch three variables most closely: Ternus’ performance under the spotlight, whether the foldable device’s hardware and software experience can trigger demand, and how Apple balances pricing, margins, and demand across new and older models.
This article is a compilation and interpretation of a third-party broker research report from Morgan Stanley dated Sept. 1, 2026, combined with public market information. The ratings, price target, earnings forecasts, and related judgments cited in the report are the views of Morgan Stanley analysts and represent the position of that institution only. They do not represent the view of TechFlowPost and do not constitute investment advice.
Markets carry risk, and decisions should be made independently. This article should not be used as the basis for buying or selling any security.
