Jefferies' Edison Lee: Expectations for Apple Intelligence to start an upgrade cycle are too high

Analyst Downgrade & Target Price - Jefferies downgrades Apple to sell from hold, citing overly optimistic expectations for a super upgrade cycle [1] - Jefferies sets a target price of $20516 (Note: This appears to be a typo and should likely be $205 or $160, needs verification) [1] Smartphone Market & Innovation - The smartphone industry, including both Apple and Android, faces a structural slowdown due to a lack of innovative features [2] - Incremental improvements in smartphones are not enough to drive significant consumer demand [3][5] Foldable Phone Expectations - The foldable phone market, exemplified by Samsung's Galaxy F7 priced at $2,000, has limited volume potential [3] - Apple's potential foldable phone sales could be three times higher than Samsung's, but may still not significantly impact overall sales [4] - The foldable iPhone is projected to be a $2,000 phone, limiting its mass market appeal [11] iPhone 17 Cycle & Pricing Strategy - The iPhone 17 cycle is performing better than expected due to attractive pricing strategies [7] - Apple maintained prices for Pro and Pro Max models while increasing the price for the Air model [7] - Apple effectively cut the price of the base model by offering a higher memory version at the same price as the previous year's lower memory version [8] - In China, Apple sells the base model at a lower price to qualify for government subsidies [8] AI & Future Expectations - Investors are hopeful that the AI future will be integrated into Apple devices [9] - There is enthusiasm for next year's foldable iPhone as a new form factor [10] - Despite positive reception to the iPhone 17, structural headwinds remain a concern [10]