$400 is Rothschild & Co Redburn's new price target for Apple (NASDAQ: AAPL), up $140 from a prior $260, paired with an upgrade to Buy from Neutral. The two components the firm says get you there: a foldable iPhone launch expected in September, priced at $2,199, and a rethinking of how Apple sources its artificial intelligence.
Foldable iPhone: the per-unit math
Analyst Timm Schulze-Melander projects 14 million iPhone Ultra units in Apple's fiscal 2027. Four million of those sales are expected to displace conventional iPhone purchases, leaving 10 million as net-new demand. At $2,199, the price sits 83% above the iPhone 17 Pro Max, and Redburn projects the model lifts Apple's average iPhone selling price by 11% by June 2027.
| Metric | Value | Note |
|---|---|---|
| New price target | $400 | Projected; prior $260 |
| iPhone Ultra price | $2,199 | Projected |
| Premium vs iPhone 17 Pro Max | 83% | Projected |
| FY2027 Ultra units | 14M | Projected |
| Net-new demand | 10M | Projected; 14M minus 4M replacement |
| Avg iPhone ASP lift | +11% | Projected by June 2027 |
| iPhone revenue vs consensus | +3% to +14% | Projected, FY26-30 |
| EPS vs consensus | +8% to +18% | Projected by FY30 |
Redburn drew on Apple's track record in adjacent categories: the company captured 65% to 75% of incremental unit growth in the earbud and smartwatch markets after entry. Consumer demand for foldables remains contested. A 2023 CNET survey found 64% of respondents had no interest. A Forbes survey offered the opposing read: 61% said they would gain immediate confidence in foldables if Apple entered the category.
The AI cost structure
Apple pays Google roughly $1 billion a year for access to a customized version of the Gemini model, which powers Apple Intelligence capabilities including an upgraded Siri. Google pays Apple approximately $27.5 billion annually in the other direction, for search placement across Apple's device ecosystem. The ratio is 27.5 to 1, and Redburn called the AI side a liability rather than an asset. The proposed fix is what the firm labeled "Fast Follower 2.0": shifting toward open-source models, potentially through a partnership with Nvidia, whose Nemotron models Redburn described as matching closed frontier-model performance.
The obstacle is history. Redburn itself noted that Apple and Nvidia have previously had "genuinely acrimonious" relations. The firm also flagged foldable production delays, display crease visibility, and hinge durability as risks to the thesis. If those headwinds stay manageable, Redburn's earnings estimates run 8% to 18% above consensus by fiscal 2030.