Apple Inc. (AAPL) is facing an awkward start to its foldable iPhone era. Just days after the $2,000 iPhone Duo went on sale, customers began reporting cracked screens, sparking a social media controversy dubbed “Crackgate.” Apple has confirmed problems with a small number of devices, raising questions about the durability of its biggest iPhone redesign in nearly two decades.
The reports began appearing shortly after the Duo’s October 23 launch. Photos shared online show similar cracks across the phone’s inner display, often near the hinge. Some owners say their screens broke within hours of use.
Apple has acknowledged the issue and is offering replacements through AppleCare. The company has not disclosed how many devices are affected or announced a recall.
Apple’s Big iPhone Bet Faces an Early Test
The timing is hardly ideal for Apple’s new CEO, John Ternus, who replaced Tim Cook in September. The Duo is one of Apple’s most ambitious product launches in years, and Ternus is preparing to lead his first quarterly earnings call on Monday, November 2.
With a starting price of $1,999, the foldable iPhone certainly isn’t cheap. But that hasn’t stopped buyers from rushing to get their hands on one, with early orders selling out and some deliveries now pushed into next year.
That makes the screen problems particularly frustrating. Apple spent years developing its foldable design, entering the market seven years after Samsung (SSNLF) launched its first Galaxy Fold.
Francisco Jeronimo, a vice president at research firm IDC, suggested the similar patterns of damage could point to problems with the hinge or the way the screen is supported when folded. However, the cause has not yet been confirmed. A former Apple screen engineer also suggested that the failures could involve a small batch of defective components rather than a broader design flaw.
Samsung, for its part, has already seized the opportunity, promoting its own foldable phones as thinner, lighter, and years ahead of Apple’s.
Could Crackgate Hurt Apple Stock?
For Apple investors, the biggest concern is whether the screen failures remain isolated or become a costly hardware problem.
A limited number of replacements would likely have little financial impact on a company of Apple’s size. A widespread defect, however, could raise warranty costs, disrupt shipments, and hurt demand for a premium product that Apple hopes will give customers another reason to upgrade.
The controversy also revives memories of Apple’s 2010 “Antennagate” episode, when iPhone 4 users complained about dropped calls. Apple eventually offered free protective cases to address the problem.
Meanwhile, the company has yet to disclose the number of affected phones, leaving investors without a clear way to judge the potential repair costs.
There’s also another complication: strong demand has already pushed some Duo deliveries into next year. If Apple needs to adjust its manufacturing process to address a hardware flaw, the existing supply delays could become harder to resolve.
Is Apple a Good Stock to Buy Now?
Turning to the Street, Apple Inc. has a Moderate Buy consensus, based on 32 ratings submitted in the past three months. The average AAPL stock price target stands at $339.37, implying a 1.57% downside from the current price.
