Tech giant Apple (AAPL) is reportedly running into challenges testing its first foldable iPhone, which could delay its release timeline. According to Nikkei Asia, the company is facing more engineering issues than expected during early testing, which is making the process more complicated and time-consuming. Because of this, there is a possibility that production and shipments could be pushed back by several months. Unsurprisingly, investors didn’t like the news, as Apple shares are down nearly 5% at the time of writing.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
It’s also worth noting that some suppliers have already been warned that production schedules might shift. While not all partners have been affected yet, the uncertainty suggests that Apple is still working through key technical problems. Indeed, one source noted that the current testing phase is critical, with April through early May being especially important for resolving these issues.
If the company cannot fix them in time, it could put the entire mass production timeline at risk. Importantly, supply chain issues or shortages do not appear to be a factor in the delay. Notably, Apple had initially planned to produce around 7 to 8 million units, which would make up less than 10% of its new iPhone lineup.
Is Apple a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 14 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average AAPL price target of $304.40 per share implies 23.3% upside potential.
