Apple shares plummeted on news that the 5G iPhone 12 could be held up due to concerns over the global COVID-19 pandemic, Nikkei Asian Review reported on Wednesday (March 25), citing sources.
Aside from supply chain issues, the tech giant is concerned there won’t be enough demand for its first 5G phone and is considering delaying the September release of the new phone by months, three sources told Nikkei Asian Review.
“Supply chain constraint aside, 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,” according to a source with inside information about internal discussions. “They need the first 5G iPhone to be a hit.”
Despite a stock market rally on Wednesday (March 25), Apple shares closed at $245.52, down 0.55 percent.
Apple was originally planning an ambitious launch of the new phone, telling suppliers to be ready to manufacture as many as 100 million with four designs, sources told Nikkei. Competitors Samsung and Huawei already released 5G phones earlier this year.
The Silicon Valley tech giant is watching the aggressive spread of the coronavirus in its biggest iPhone markets — the U.S. and Europe — which account for over 50 percent of sales, the sources told Nikkei.
With the exception of China, all of Apple’s retail stores are closed and much of its workforce has been working from home. A memo sent to employees on Tuesday (March 23) hinted at a staggered reopening in early April, according to Apple Insider.
“We have been notified to start shipping in big volumes to meet Apple’s new product launch by the end of August, instead of like in previous years, when it would be sometime in June,” a supplier told Nikkei. “The change was made very recently, and that could imply that the mass production of the phone could also be delayed for months.”
The report follows a report by JPMorgan analysts forecasting that Apple could hold off on the introduction of its new iPhone by one to two months, CNBC reported.
Sources reportedly told Nikkei in October 2019 that it was planning a September rollout of at least 80 million units of three new iPhone models powered by a Qualcomm 5G modem chip.