Jefferies Sees Signs of Softer iPhone 18 Demand as Resale Prices Weaken

Apple’s latest iPhone cycle is showing some early signs of softer demand, according to Jefferies, with weakness in Hong Kong’s resale market raising questions about how strongly consumers are responding to the new iPhone 18 Pro and iPhone 18 Pro Max.

In a research note dated September 28, Jefferies analysts pointed to weaker resale prices for the latest high-end iPhones compared with the previous generation. The brokerage said the iPhone 18 Pro is trading at discounts across almost all storage configurations, while premiums for the 18 Pro Max have fallen sharply from launch-day levels.

The signal is important for Apple because the iPhone remains central to its hardware business. However, resale prices represent only one indicator of consumer demand and should not be treated as a definitive measure of global iPhone sales.

iPhone 18 Pro Resale Prices Show Signs of Weakness

Jefferies' latest assessment focuses heavily on Hong Kong, a market that has historically been closely watched for early iPhone resale activity.

According to the brokerage, the 256GB iPhone 18 Pro Max was the only configuration still commanding a meaningful resale premium as of September 27, at roughly 8% above Apple's official price.

The higher-capacity models were considerably weaker. Jefferies said the 2TB version was trading around HK$1,049 below Apple's official price at 5 p.m. on September 27.

The comparison with last year's launch is also significant. Jefferies said resale premiums for the iPhone 18 Pro Max were below those of the iPhone 17 Pro Max at the same point last year across every configuration except the 256GB model.

For Apple, weaker secondary-market pricing can indicate that buyers and resellers are less willing to pay a premium for immediate access to the newest models.

That does not necessarily mean retail demand has collapsed. But it does suggest the launch enthusiasm seen in some previous iPhone cycles may be less pronounced in certain markets.

Higher Prices Could Be One Reason for Softer Demand

Jefferies attributed part of the weakness to the higher prices of the new models.

The brokerage said price increases of around $400 and $500 for certain configurations could be difficult to justify relative to consumers' perception of the additional value offered by the new devices.

Price sensitivity becomes particularly important at the premium end of the smartphone market.

Apple has increasingly relied on higher-priced models to support revenue and average selling prices. But the strategy also means that a customer considering an upgrade has to justify a larger financial outlay.

For existing iPhone users, the decision is therefore not simply whether the latest model is better. It is whether the improvements are sufficient to justify replacing a relatively recent device.

That equation becomes more challenging when consumers face broader cost-of-living pressures.

Storage Changes Add Another Question

Jefferies also highlighted Apple's move from TLC to QLC NAND memory in the 1TB and 2TB versions.

NAND is the type of flash memory used for smartphone storage. TLC and QLC refer to different ways of storing data within memory cells, with QLC generally allowing higher storage density but carrying different performance and endurance characteristics.

Jefferies suggested that the change could make the highest-capacity iPhone 18 Pro models less attractive to buyers who are paying a significant premium for additional storage.

This issue is particularly relevant because the 1TB and 2TB models sit at the top of Apple's pricing structure.

If consumers become more cautious about paying for premium storage, Apple could see a change in the product mix even if overall iPhone demand remains relatively healthy.

Delivery Times Send a More Mixed Signal

The demand picture is not entirely negative.

Jefferies found that delivery lead times for the iPhone 18 Pro and Pro Max initially declined across most markets before recovering toward the end of the week. That creates a more complicated picture than resale prices alone.

For the iPhone 18 Pro Max, delivery times as of September 27 were longer than a year earlier in Hong Kong, China and the United States. They were shorter in Britain and Germany and unchanged in Japan.

For the iPhone 18 Pro, lead times were longer in Hong Kong and China, shorter in the United States and Germany, and broadly unchanged in Britain and Japan.

Longer delivery times can normally indicate stronger demand, but Jefferies cautioned that the recent rebound could partly reflect supply constraints as Apple prepares production for its upcoming Duo foldable device.

That means delivery data needs to be interpreted carefully. A longer wait does not automatically mean more customers are placing orders.

iPhone Duo Could Change the Upgrade Equation

Apple's first foldable iPhone, the iPhone Duo, is another important factor in the demand outlook.

Jefferies expects pre-orders for the Duo to begin on October 16, ahead of deliveries from October 23.

The new form factor could attract high-end consumers who might otherwise have purchased an iPhone 18 Pro or Pro Max.

This is known as cannibalisation: sales of one product are reduced because customers choose another product from the same company.

The effect could be particularly relevant during the initial launch cycle because consumers with larger budgets may decide to wait for Apple's new foldable rather than spend heavily on a conventional premium iPhone.

Earlier Jefferies analysis had also highlighted the possibility that the Duo could draw demand away from the iPhone 18 Pro family.

China Presents an Additional Challenge for the Foldable

Jefferies has also identified a potential adoption issue for the Duo in China.

The brokerage said the device is eSIM-only and supports only two eSIM numbers in China, compared with support for as many as eight eSIM numbers on compatible iPhones in Hong Kong.

That could matter to Chinese users who maintain separate numbers for work, personal use or travel.

According to Jefferies, consumers who want to add a travel eSIM after arriving in China could face additional steps involving their domestic number and mobile operator.

The restriction may have little impact on early adopters who are highly motivated to buy a foldable iPhone. But Jefferies believes it could become more important as Apple tries to expand the device to a broader customer base.

What Softer iPhone 18 Demand Could Mean for Apple

The key question for investors is whether these early signals eventually translate into weaker unit sales, lower average selling prices or a less favourable product mix.

Apple can potentially offset weaker unit growth through higher prices, premium models, services revenue and other hardware categories.

However, iPhone performance remains important because it influences the wider Apple ecosystem. A strong iPhone installed base supports opportunities in services, accessories and future product upgrades.

A weaker upgrade cycle could therefore have effects beyond the initial handset sale.

At the same time, investors should avoid drawing a definitive conclusion from resale prices alone. Apple's official sales data, regional revenue trends and management commentary will ultimately provide a broader picture.

Apple Stock: What Investors Should Watch

The market is likely to focus on several indicators over the next few weeks.

First is the direction of iPhone 18 Pro and Pro Max delivery times after the initial launch period. If lead times continue shortening, investors could interpret that as evidence of softer underlying demand, although supply constraints could complicate the signal.

Second is the resale market. Persistent discounts or shrinking premiums would provide another indication that launch-day scarcity is not translating into strong secondary-market pricing.

Third is the performance of the iPhone Duo. Strong demand could be positive for Apple's overall premium-device business while simultaneously putting pressure on conventional Pro models.

Finally, Apple's next earnings update should provide a more comprehensive indication of how the new product cycle is affecting revenue, margins and demand.

Jefferies maintained its Underperform rating on Apple in the September 28 note. That is the brokerage's assessment and should not be confused with a confirmed company outlook or an independent prediction of Apple's stock performance.

Risks to the Bearish Demand View

There are also reasons not to overinterpret the current signals.

The iPhone 18 launch is still in its early stages, and resale markets can be highly volatile. Premiums can disappear quickly as supply improves, even when underlying consumer demand remains healthy.

Delivery times can also be affected by Apple's production allocation, logistics and inventory decisions rather than customer orders alone.

In addition, Apple's upcoming Duo could expand the overall premium iPhone market instead of simply shifting customers away from the Pro models.

That makes the next several weeks particularly important.

Bottom Line

Jefferies sees early signs of softer iPhone 18 demand, mainly because resale prices in Hong Kong are weaker than those seen during the iPhone 17 cycle. Higher prices, changes to high-capacity storage and potential competition from Apple's new Duo foldable are among the factors the brokerage is watching.

The evidence remains mixed, however. Delivery times in several major markets remain longer than last year, while resale prices provide a weaker signal. Investors will need more data before judging whether the issue represents a temporary launch effect or a broader slowdown in Apple's premium iPhone cycle.

The key indicators to monitor now are resale premiums, delivery lead times, Duo demand and Apple's upcoming financial results.

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This article is for informational and educational purposes only and should not be considered investment advice.