Can New iPhone Duo Power Apple's Stock Higher?

September has become the month when Apple (NASDAQ: AAPL) introduces some of its newest smartphones and other products. That tradition continued at its "Surprise and Shine" event on Sept. 9, and the biggest news to come out of it was the introduction of its first-ever foldable smartphone, the iPhone Duo.

Now, foldable smartphones are not new. Chinese display maker Royole introduced the first foldable smartphone, the FlexPai, back in 2018, with Samsung Electronics launching the first mainstream version, the Galaxy Fold, to the public months later in 2019. They also haven't been very popular.

However, Apple has a history of refining technology to its fullest rather than being first, and the launch of the Duo looks like it could help turn the foldable smartphone market inside out.

Redefining the foldable smartphone

At the event, new Apple CEO John Ternus said that prior foldable phones felt like "two phones awkwardly stuck together." While there have been various designs around foldable smartphones, Apple has decided to go with a passport shape with a titanium frame. The device has a 5.4-inch outer screen that can be opened up to a 7.6-inch display. The goal is to have a device with the portability of a smartphone but a larger display closer to that of a tablet that feels natural and intuitive.

The new iPhone Duo will start at $1,999 for a 256-GB model, which is only about $100 more than the competing Samsung Galaxy Z Fold8 and Alphabet's Google Pixel 11 Pro Fold. The price can go as high as $3,199 for a version with 2 TB of memory. The pricing that closely matched competitors was a bit of a surprise and should be a catalyst for driving sales and bringing more consumers to the foldable category. The Duo can be preordered starting Oct. 16 and will go on sale in 70 countries starting Oct. 23.

Foldable models accounted for less than 2% of global smartphone shipments last year, with only around 18.3 million units shipped. However, IDC projects foldable smartphone shipments will increase 30% this year versus a 1.4% decline for nonfoldable smartphones. Meanwhile, Counterpoint Research has projected Apple would ship 6 million units this year.

With Apple now in the fold, I'd expect foldable models to become more mainstream. The Duo was widely praised by journalists who got to interact with the device, for both its hardware and software, and there is always a sense that when Apple finally enters a market, it helps legitimize it. Foldable smartphones are relatively popular in China, led by Huawei, and it wouldn't be surprising if the country becomes the biggest market for Duo early on.

Outside of Duo, Apple also introduced the iPhone 18 Pro and iPhone 18 Pro Max. The new models will be powered by its new A20 chip, the same as Duo, and have just received a $100 price increase, starting at $1,199 and $1,299, respectively. It also launched two new Apple Watch versions and its next generation of AirPods. With device prices on the rise, Apple also introduced Apple Upgrade, a new leasing program with low monthly payments that lets users upgrade to a new device at the end of the lease.

Image source: The Motley Fool.

Can Duo fuel Apple's stock price?

Given its higher price point and the strong reception Duo has received, I think it can help fuel an upgrade cycle and attract new Apple customers. While foldable smartphones are not new, the Duo appears to just hit differently, as Apple spent years carefully crafting it to get both the hardware and software experience right. This should help drive product revenue in the coming year, when industrywide device shipments are expected to be sluggish due to higher costs from ballooning memory prices.

At the end of the day, the Duo is another device that will help funnel users into the Apple ecosystem, bolstering its high-gross margin service revenue. Apple has one of the best compounding business models in the world, and it has given investors a new product to get excited about for the first time in a long time. I think that can likely help fuel this growth stock's higher price.

Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool has a disclosure policy.