Apple's Foldable iPhone to Spark Upgrade Cycle, But Production Limits May Cap Earnings

Apple Inc. (AAPL) has launched its first foldable smartphone, the iPhone Duo, at a starting price of $1,999.

Gary Black predicts that this new device will trigger a massive 'upgrade cycle' for Apple's hardware, substantially increasing the average selling price of iPhones.

Black notes that the iPhone Duo's folding form factor makes it an attractive status symbol for 20- and 30-somethings, who want to showcase their wealth through high-end technology. It also allows business travelers to carry a single device instead of two.

However, Apple faces production limitations, which may restrict incremental earnings for six months. The company also risks cannibalizing iPad sales with the release of the iPhone Duo.