Apple (NASDAQ:AAPL) shares fell 0.8% Tuesday morning following a report of engineering challenges with its first foldable iPhone that could delay the device’s launch.

The stock declined alongside broader tech weakness, with Nasdaq 100 futures down 0.5%. Nikkei Asia reported late on Monday that Apple has encountered setbacks during the engineering test phase of its foldable iPhone, potentially pushing back mass production and shipment schedules.

Engineering development issues could delay the first shipments of the foldable iPhones by months in a worst-case scenario, according to the Nikkei report. “It’s true that more issues than expected have emerged during the early test production phase, and additional time will be needed to resolve them and make necessary adjustments,” the report said, citing a source familiar with the matter.

Nikkei reported in January that Apple planned to focus on delivering its first foldable iPhone and two non-folding models with upgraded cameras and larger displays for a flagship launch in the second half of 2026.