Economic Observer reporter Zheng Chenye

On October 23rd, Apple's first foldable screen phone, iPhone Duo, went on sale worldwide, with a starting price of 15999 yuan for the domestic version. After opening reservations on October 16th, the delivery time displayed on Apple's official website was quickly scheduled for January 2027. Apple has publicly stated that the pre order demand for iPhone Duo is "extraordinary" and the company is making every effort to deliver the product to consumers as soon as possible.

Behind the repeated delays in delivery time is the constraint of production capacity. Compared with traditional iPhones, the folding screen, hinges, and final assembly of iPhone Duo all use new processes, and the production ramp is slower than that of straight board machines. The reporter learned from the supply chain enterprise that the iPhone Duo did not enter mass production until the day of the pre order opening. Market research firm Counterpoint Research estimates that the shipment volume of iPhone Duo this year will be about 6 million units, significantly lower than Apple's earlier plan.

The larger shipment scale will not be available until next year, and the high volume of iPhone Duo is also related to the growth of the entire foldable screen category. Market research firm IDC predicted in August this year that without Apple's entry, global shipments of foldable phones would experience a double-digit year-on-year decline this year. Multiple interviewees told reporters that the supply chain is already preparing for the mass production and expansion of iPhone Duo next year.

Whether we can smoothly increase production next year depends on market demand. Currently, the price increase of storage chips is driving up mobile phone prices and suppressing the demand for replacement. Preliminary data released by IDC on October 14th shows that global smartphone shipments in the third quarter of 2026 will decline by 22% year-on-year. Francisco Jeronimo, Vice President of Global Devices at IDC, believes that the pressure of price increases is shifting from mobile phone manufacturers to consumers, and many consumers are choosing to continue using their old phones.

For domestic supply chain enterprises, the high volume rhythm of iPhone Duo is related to the scale of orders and the time to fulfill them. Can this expensive new phone continue to increase in volume during the period of storage price increase and widespread price increase of mobile phones? What are the links in the domestic supply chain where the increase in volume will fall?

Volume Rhythm

The volume rhythm of iPhone Duo will be determined by production capacity this year and demand next year.Liz Lee, Deputy Director of Counterpoint Research, told Economic Observer that the previously circulated claim that the iPhone Duo will ship 10 million units in 2026 comes from Apple's relatively aggressive production and shipping plan around the end of 2025. However, in the first half of this year, there were some issues with the production stability and delivery time of foldable OLED (organic light-emitting diode) panels. The hinges underwent design adjustments, and the final assembly time to reach a stable state exceeded expectations, resulting in a reduction in production and shipping targets.

The difficulty is not concentrated in any one link, the panel, hinge, and final assembly all need to be synchronized and stabilized in large-scale production. As production gradually stabilizes, Counterpoint Research predicts that the production of iPhone Duo will continue to increase in November and December. Apple will prioritize ensuring supply to major markets such as the United States and China, while supply to other markets may be more tight.

In addition, there is still room for additional orders this year. The market manager of a large precision manufacturing enterprise in southern China told the Economic Observer that the official purchase orders for i-Phone Duo are currently about 3.5 million units, and the materials already in place can support the production of about 7.2 million units. If the sales after listing can continue the popularity of pre orders, this year's orders may increase to 6 million to 6.5 million units.

Apple's supply chain orders are usually divided into two parts. One part is the formal purchase order, which is usually not changed after being locked in; The other part is the demand forecast for rolling updates, and the parts outside the lock up period need to be reviewed weekly for possible adjustments at any time.

At present, it is expected that the shipment scale next year will significantly expand. The aforementioned market leader mentioned that the preliminary forecast currently received by the supply chain is that iPhone Duo will be shipped in the first quarter of 2027 with 8 million to 10 million units. He judged that from the fourth quarter of 2026 to the third quarter of 2027, the planned production capacity of iPhone Duo could reach 30 million units, but the actual output would depend on market feedback and yield (the proportion of qualified products in the total output), with yield being the main constraint.

Whether these predictions can be fulfilled depends on whether the demand under price constraints can be sustained. In fact, the impact of storage price increases on Apple Inc. is relatively small. According to IDC's relevant data, in the third quarter of 2026, Apple's smartphone shipments decreased by 4% year-on-year, a much smaller decline than the overall market. Its market share increased from 18.2% in the same period last year to 22.4%. Jeronimo also pointed out that in the shrinking market, manufacturers with economies of scale, stable supply, and high-end product portfolios are continuing to increase their market share.

However, the pressure brought by rising storage costs has not yet peaked. Nabila Popal, Senior Research Director of Global Devices at IDC, stated in mid October that the cost of storage chips has increased by about 350% compared to last year and is still rising. The most difficult time has not yet arrived, and the mobile phone market has not bottomed out.

Compared to foldable phones, the pricing of iPhone Duo is not particularly high. Its starting price in the United States is $1999, only $100 higher than Samsung's Galaxy Z Gold 8 released in July. LizLee believes that as the first generation product, Apple's pricing is quite competitive, and existing iPhone Pro users and early adopters will bring strong demand. The large screen and overall interactive experience will also boost early sales.

But the Pro users targeted by iPhone Duo are also experiencing price increases themselves. The iPhone 18 Pro and ProMax released by Apple in September have a starting price of 9999 yuan and 10999 yuan respectively in China, both of which are 1000 yuan higher than the previous generation; The starting price of iPhone Duo in China is 5000 yuan higher than that of iPhone 18 Pro Max.

In fact, high-end users are not unresponsive to prices. During the interview, the reporter learned that due to the continuous rise in material prices, Apple predicts that the future sales of iPhone 18 Pro and ProMax may not meet expectations. The company has notified the supply chain to slightly lower the production schedule of these two models in the first quarter of 2027, with a magnitude of about 5%. In the eyes of the respondents, the adjustment is not significant, but it reflects the trend of slowing demand, and the price increase of new phones exceeds the affordability of some consumers.

Additionally, price increases may not necessarily push consumers towards foldable screens. Analysts have pointed out that after the price increase of straight panel models, the relative price difference with foldable screens will slightly narrow, which may be helpful for foldable screens. However, foldable screen phones also face many cost pressures. Wang Xiaoya, Research Director of the Mobile Business Unit of Qunzhi Consulting, also told the Economic Observer that the durability of key components in foldable screens still needs to be improved, and there is a trade-off between thinness and imaging.

Of course, Apple itself is also waiting for market feedback. A supply chain insider told reporters that the preliminary forecast for iPhone Duo in the first quarter of next year only includes the total quantity, and has not been refined to various configuration versions. The specific production and configuration plans will be determined by Apple after the market feedback in the first month of its launch.

In short, for iPhone Duo, the demand this year is supported by high-end Apple users, but how much can be added next year depends on the affordability of these users during the price increase cycle.

Incremental Direction

The increment brought by increasing volume will not be evenly distributed to every link. The reporter learned from the interview that the value of the components of foldable screen phones is mainly concentrated in the panel and hinge, and the increment shared by domestic enterprises falls more in the cover glass, hinge and structural components, as well as the upstream material link.

The high value of panels and hinges mainly lies in the difficulty of manufacturing. Folding panels replace glass substrates with flexible materials and maintain display effects through repeated opening and closing, making it more difficult to guarantee yield and durability; A hinge is a mechanical structure that needs to be repeatedly opened and closed in a very small space, and there are also issues with yield and durability. In addition, as Apple pursues thinner and lighter designs, lightweight structural materials will also drive up costs. The increment in the panel segment is mainly obtained by South Korean companies. During the interview, the reporter learned that the folding panel of iPhone Duo is exclusively supplied by South Korean panel company Samsung Display.

On top of the panel, there should also be a bendable cover plate. Ordinary mobile phone glass cannot be bent, and folding screens require UTG (ultra-thin flexible glass), which is thin enough to open and close repeatedly with the screen. In addition, CPI (Transparent Polyimide) is a flexible transparent film that can be used as a cover plate alone or in combination with UTG.

Cover glass is a link that domestic enterprises have already entered. Consumer electronics glass cover manufacturer Lansi Technology (300433. SZ) introduced at an investor exchange event on August 23 that the company supplies UTG glass, CPI film, and other related products for major customers' folding machine projects this year. The products will start shipping at the end of the second quarter of 2026 and are already in the stage of mass delivery in late August. Looking ahead to next year, Lansi Technology expects a comprehensive increase in foldable screens for major clients.

The hinge is another incremental and concentrated component, and it is also one of the most complex structural parts in foldable phones. The hinge of a folding screen is generally composed of components such as a pivot shaft, gears, connecting rods, support plates, and an outer hinge cover, which are assembled together and called a hinge module. The hinge module of i-PhoneDuo consists of over 100 components, responsible for controlling the opening and closing and supporting the middle of the screen.

Domestic structural component enterprises have also shifted from hinge links to incremental growth. For example, consumer electronics component company Lingzhizhi Manufacturing (002600. SZ) stated in response to investors' questions on September 4th that the company supplies hinge structural components, screen support plates, and other components for customers' new generation terminal products, with a single unit value several times that of straight board machines. The screen support plate is attached to the back of the flexible screen to support the screen and maintain the flatness of the fold.

The new technology is still changing the distribution of value in the industrial chain links. An industry insider interviewed told reporters that 3D printing is mainly used for hinge components and middle frames in mobile phones, and the hinge cover of iPhone Duo is made of 3D printed recycled titanium. In traditional craftsmanship, bar suppliers provide rectangular metal bars, which are then cut into shape using CNC (numerical control) machines by frame manufacturers. However, after adopting 3D printing, the raw materials are mainly printed by upstream material manufacturers, and only a small amount of CNC precision machining is required thereafter. The above industry insiders also mentioned that the purchase prices of the middle frames made by 3D printing and CNC processes are similar for the assembly plants, but the value of the upstream material links varies greatly. Currently, middle frame manufacturers and bar material suppliers are both purchasing 3D printing equipment.

The unit price of hinges usually decreases with the "annual decline" and then rebounds with the replacement. After the mass production of components, the purchase price usually decreases in batches, which the manufacturing industry refers to as "annual decline". Suppliers generally rely on yield improvement and economies of scale to digest the corresponding pressure. The market leader mentioned earlier that the purchase price of the first generation hinge module for iPhone Duo will gradually decrease quarter by quarter, and may drop to around $80 by September 2027. It is expected that Apple will launch the next generation product of iPhone Duo in 2027, and the processing technology and materials of the hinge will be upgraded at that time. The initial price is expected to be around $103.

In addition, the new materials used for folding screen hinges have also brought possible opportunities for domestic material companies. For example, Yian Technology (300328. SZ), a liquid metal and magnesium aluminum alloy component company, stated during an institutional survey on August 27th that zirconium based liquid metal hinge spindles are one of its core products, and the gross profit margin of liquid metal products is significantly higher than that of traditional magnesium aluminum alloy products. However, the company did not disclose the corresponding end brand of the related products. Liquid metal, also known as amorphous alloy, does not have the crystal structure of ordinary metals in terms of internal atomic arrangement. It has high strength and strong elastic deformation ability, making it suitable for making precision small components such as shafts that require repeated force.

In the eyes of multiple respondents, after Apple enters the foldable screen market, the foldable screen supply chain will mature faster. Some respondents also mentioned that Apple's scale and strict quality standards will encourage suppliers to increase investment in engineering technology, capacity building, and yield improvement. In the long run, this will help improve the performance and cost structure of the entire industry.

As for whether foldable screen phones will become popular, Wang Xiaoya believes that Apple's entry into the market will accelerate the process of foldable screens becoming mainstream high-end models. However, due to cost structure and technological complexity limitations, foldable screen products will still maintain their high-end flagship positioning, and higher material costs will constrain their price decline.

(Author Zheng Chenye)