Apple Stock Drops 5% on Foldable Delays and Services Slowdown

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Find out what happening right now and get all the pieces of the puzzle on important data activity before the major news sources break the story and see what are the trends
 

•  07 Apr 2026
 

$AAPL Apple shares fall 5% following negative reports weighing on sentiment in the technology sector versus peers in consumer electronics and services within the Nasdaq index, driven by a product delay catalyst and services deceleration. The decline follows four consecutive sessions of gains totaling about 5%. The primary trigger was a report by Nikkei Asia indicating Apple is encountering difficulties in the engineering validation testing phase of its first foldable iPhone. Development issues may delay mass production timelines and initial shipments, with a downside scenario implying a delay of several months.

The report adds to prior January publications stating Apple plans to launch the foldable iPhone alongside two additional models with camera and display upgrades as part of a flagship release in the second half of 2026. Development delays may impact the product roadmap and postpone its entry into the foldable device market. This introduces timing risk to a key innovation cycle within the hardware segment and alters competitive positioning versus foldable leaders.

Alongside this, App Store activity data also pressured the stock. According to a UBS analyst, Sensor Tower data indicates approximately 7% revenue growth in the App Store for the March 2026 quarter, with zero growth in the US, one of the core markets. Excluding currency effects, growth stands at about 5%, similar to the prior quarter. The data points to a relative slowdown in Apple services activity, considered one of its primary growth engines in recent years.

Additional analysts noted renewed weakness in gaming impacted store performance. Gaming revenues declined about 1% year over year, with a 2% decline in the US and 3% in Japan. China showed approximately 7% growth but did not offset declines in other markets. This reflects a mixed geographic demand profile and pressure within a historically high-margin vertical.

iPhone sales, however, continue to show stability and growth despite a saturated global smartphone market and high competition. According to Bernstein analysts, the iPhone 17 series is the main driver behind strong performance, with demand remaining high several months after the September launch. Data shows approximately 26% growth in consumer sell-through in February year over year, reflecting real end-market demand rather than channel inventory movements.

Unit sales of the iPhone 17 are approximately 20% higher than the iPhone 16 over the September–January period, indicating sustained momentum beyond the initial launch phase. The base iPhone 17 model accounts for about 39% of total sales growth, signaling broad demand across price-sensitive consumers. At the same time, the iPhone 17 Pro Max contributes about 21% of total growth, indicating strong demand at the premium end and a balanced pricing ladder.

Another trend reflected in the data is an increase in average selling price. February saw an approximate 6.9% increase year over year, continuing a trend that began with the September launch. With the exception of October, ASP has risen consistently each month, likely driven by a mix shift toward higher-end models or reduced discounting in certain markets. China stands out, with ASP rising approximately 20.2% year over year, significantly above the global average.

Despite positive sales and pricing data, actual revenue is not meeting expectations. Bernstein estimates iPhone revenues for January and February at approximately $35.7 billion, below the $56.5 billion forecast. The gap between field performance and reported revenue may stem from shipment timing, promotional activity, retailer credit terms, and geographic demand variation. Some sales may also not yet be recognized in reported earnings.

In the background, Apple reported particularly strong first-quarter results, with record iPhone revenue of $85.3 billion, significantly above market expectations of $78.3 billion. This compares to approximately $69.1 billion in the same quarter last year, illustrating annual growth and the contribution of the new product line.

In parallel, Apple is expanding into the personal computer market. The launch of the MacBook Neo, a low-cost laptop priced at approximately $599, represents an attempt to reach a broader user base. According to Bank of America estimates, a 10% penetration of the entry-level PC market could add approximately $0.03 to earnings per share in 2026, representing a modest but consistent contribution.

Beyond hardware sales, this move may strengthen Apple services segment. As more users enter the ecosystem, the probability of adopting additional services increases, generating recurring revenue. Currently, the iPhone installed base is estimated at approximately 1.5 billion devices compared to about 260 million Mac devices, suggesting room for ecosystem expansion.

However, Apple operates within a complex industrial environment that includes a global memory shortage. This shortage is driven in part by rising demand for memory components in AI data centers. Memory manufacturers are allocating a significant portion of production to higher-margin AI products, reducing supply for consumer devices such as smartphones and PC. This leads to rising component prices, potentially pressuring margins and forcing a choice between price increases and cost absorption.

Next trigger: confirmation of foldable iPhone timeline revision or continued App Store growth deceleration.

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