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Apple Shares Tank As Report Says New iPhone Launch Could Be Moved To Next Year

Benzinga logo Benzinga 3/26/2020 Neer Varshney
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The shares of Apple Inc. (NASDAQ: AAPL) dropped late Wednesday as a report by The Nikkei Asian Review suggested a significant delay in the launch of the next iPhone.

What Happened

Apple's decision comes as the novel coronavirus (COVID-19) pandemic has hurt product development schedule, supply chain, and consumer demand, according to the Nikkei.

People close to the matter told the Nikkei that the fact that this will be the company's first iPhone with 5G technology is also contributing to the pressure for the device to be a hit.

"[Apple] is concerned that the current situation would significantly lower consumer appetite to upgrade their phones, which could lead to a tame reception of the first 5G iPhone," one of the sources said. "They need the first 5G iPhone to be a hit."

The Cupertino-based company typically launches new iPhones around September or October every year but is considering delaying the launch by months this time.

"The discussion is still at an early stage, and the fall launch is not completely off the table," a person with direct knowledge of the matter told the Nikkei. "But the 5G iPhone could be postponed to 2021 in the worst-case scenario."

The final decision in the matter would be taken at the latest by May, according to the Nikkei sources.

Why It Matters

The drop comes at a time when the wider market surged with the hope of the United States Senate approves a $2 trillion economic stimulus package for corporations, small businesses, and individuals affected by the coronavirus outbreak.

Apple's shares surged earlier in the day, reaching as high as $257.9. The surge came as Deutsche Bank analyst Jeriel Ong upgraded the stock from hold to buy, saying that Apple's valuation looked attractive following the recent selloff, as reported by MarketWatch.

Price Action

Apple's stock closed 0.55% lower at $245.52 on Wednesday. The shares traded 0.8% higher at $247.52 in the after-hours session.

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