The market woke up on the right side of the bed this morning, with the Dow Jones Industrials (INDEX: ^DJI) promptly soaring by as much as 255 points, as investors expressed optimism over the European debt crisis that has plagued the market for ages. The head of the European Central Bank voiced a commitment to do "whatever it takes to preserve the euro."

I’m gonna sit this one out. You guys go on without me.
Yet, as blue chips pop, big daddy Apple (Nasdaq: AAPL) sits in the red  as of this writing, sitting on the sidelines, while other tech stocks participated in the broad-based rally. Microsoft (Nasdaq: MSFT) was enjoying gains on hopes that it might benefit from a delay of Google Android tablets running Intel chips. Mr. Softy, Big G, and Chipzilla were all in the green. What gives?

Investors continue to increasingly focus on the iPhone for Apple’s success, particularly in the wake of a tough quarter that the Mac maker just put up, due to a larger-than-expected sequential drop off in iPhone unit sales, and a slew of other factors.

Rumor has it
The culprit today is a report from the Far East, Want China Times, to be precise, citing that Apple is going to delay the launch of the next iPhone due to supply constraints. Baseband supplier Qualcomm’s (Nasdaq: QCOM) newest generation of modems is built on a 28-nanometer manufacturing process, and these chips are widely expected to serve up cellular connectivity in the next iPhone.

They’ll support just about every wireless standard known to man, notably including China Mobile’s unique network, paving the technical way to that pair’s inevitable partnership. These chips are critically important to the sixth-generation model.

Qualcomm’s problem becomes Apple’s problem
The problem is that Qualcomm has been suffering supply constraints related to its 28-nanometer chips all year, as primary manufacturing partner Taiwan Semiconductor Manufacturing (NYSE: TSM) struggles to meet demand. Even though TSMC doesn’t directly supply chips to Apple, it can still hold it back.

Qualcomm is also faced with balancing demand for its own newest Snapdragon S4 mobile applications processors, which are also built on 28-nanometer. That’s why it has tapped additional chip manufacturers like United Microelectronics and Samsung.

Who do you believe?
The report conflicts with other reports earlier this week that Apple is planning on launching the next iPhone alongside an iPad Mini as early as September. This prediction was made by KGI Securities analyst Ming-Chi Kuo, which is significant, because Kuo has made numerous accurate predictions in the past, including the new MacBook Pro with Retina display, and others. Although Kuo concedes that supply will likely be limited by component availability, and low yields for in-cell touch panel technology.

With the iPhone unit sales slowdown expected to continue in the current quarter, the device’s launch is extremely important, as Android competition intensifies. Samsung just announced it has now sold 10 million of its Galaxy S3 smartphone, and prospective iPhone buyers won’t wait forever. Most consumers and investors expect to see the new iPhone in either September or October, and a postponement beyond that timeframe would be quite negative, indeed.

Even though the iPad business is showing robust growth in its formative years, the majority of revenue and profits still rely on the iPhone, comprising half of trailing-12-month sales. For better or for worse, this is still the iPhone show, and a delayed launch would definitely be for the worse.

Despite any short-term hiccups, Apple’s long-term story remains intact. The Motley Fool has just launched a premium research service all on Apple. Sign up now to read about how Apple’s long-term fundamental drivers are as strong as ever.