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Apple Inc.'s (NASDAQ:AAPL) first foldable iPhone is drawing strong early demand in the U.S. and China, with limited inventory, long delivery delays and aggressive carrier promotions fueling interest despite a starting price of about $2,000.
The iPhone Duo, which went on sale Friday, Oct. 23, attracted crowds at Apple stores worldwide as customers rushed to experience the company's first major physical redesign of the iPhone in nearly two decades.
At Apple's flagship Fifth Avenue store in New York, walk-in inventory sold out within two hours of opening, CNBC reported. A similar shortage emerged in Austin, Texas, where Apple CEO John Ternus greeted customers and employees at a company store.
The line outside the New York store more than tripled from roughly 60 people the previous evening by 4:45 a.m., with additional customers arriving before doors opened at 8 a.m.
Demand has also been robust in China, where resellers gathered outside a Beijing Apple store offering premiums to customers willing to part with their newly purchased devices.
One reseller said a buyer was prepared to pay $1,500 above the official price, while black-market premiums reached approximately $600, according to CNBC. The device sells for roughly $2,400 to $4,000 in China, depending on the configuration.
The strong reception comes as U.S. wireless carriers offer substantial incentives to make the premium handset more affordable.
AT&T Inc. (NYSE:T) is offering up to $1,200 in discounts with an eligible trade-in and qualifying service plan, potentially reducing the effective cost of the entry-level Duo to about $800 over three years, or roughly $22 per month. Competitive offers from T-Mobile US Inc. (NASDAQ:TMUS) and Verizon Communications Inc. (NYSE:VZ) bring the effective price closer to $1,000.
Apple has also introduced a leasing program and trade-in options aimed at lowering the initial cost of ownership.
Apple marketing chief Greg Joswiak told CNBC that the iPhone's historically strong resale value helps offset the expense of upgrading, giving customers additional value when trading in or selling older devices.
The Duo also presents an attractive financial opportunity for Apple.
Counterpoint Research's preliminary manufacturing estimates suggest the 512-gigabyte Duo carries a gross margin above 55%, compared with margins in the mid-40% range for a comparable iPhone 18 Pro Max.
Those economics suggest the foldable device could increase Apple's average iPhone selling price and profitability even without achieving mass-market sales volumes.
Still, early reviews have highlighted potential drawbacks, including overheating, limited camera zoom capabilities and applications that have yet to be optimized for the foldable display.
Questions also remain about the long-term durability of the folding screen and whether a visible crease could develop with repeated use. Some early durability tests have involved tens of thousands of folds.
Apple is increasing production to address supply shortages, though the company has not identified the components responsible for the bottlenecks. Industry reports have suggested possible constraints involving the display or hinge.
In China, Apple faces an additional challenge in expanding its artificial intelligence capabilities. The company has begun beta testing Apple Intelligence in the country following regulatory approval for Alibaba Group Holding Limited (NYSE:BABA) AI models to support the technology on the Duo and other Apple devices, CNBC reported.
The foldable phone's launch also comes at a critical moment for Apple's leadership and financial outlook.
Investors are awaiting Ternus' first earnings call as CEO, when the company is expected to provide guidance for the December quarter. Apple faces challenging year-over-year comparisons after iPhone revenue reached approximately $85 billion in the previous December quarter, a 23% increase from a year earlier.
For now, the combination of early sellouts, resale premiums and extended delivery estimates points to considerable consumer interest in Apple's newest product category.
Whether that enthusiasm translates into sustained demand will become clearer as additional inventory reaches stores and Apple provides its next financial outlook.
AAPL Price Action: Apple shares were down 1.24% at $343.40 during premarket trading on Monday. The stock is trading near its 52-week high of $348.36, according to market data.
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