Tuesday, April 23, 2024

Apple Stock Falls After Report of Weak iPhone Demand

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On Monday, Apple’s share price fell below $500 for the first time in nearly a year. Experts blame the sudden slide on a Wall Street Journal report that indicated weak demand for the iPhone.

According to The Wall Street Journal’s Juro Osawa, “Apple Inc. has cut its component orders for the iPhone 5 due to weaker-than-expected demand, people familiar with the situation said Monday, indicating sales of the latest smartphone haven’t been as strong as previously anticipated. Apple’s orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order, the people said. The Cupertino, Calif., company has also cut orders for components other than screens, according to one of the people. Apple notified the suppliers of the order cut last month, the people said.”

ZDNet’s Zack Whittaker reported, “Apple’s share price tanked in early pre-market trading, down by almost 4 percent, dropping below the $500 per share mark — a place the company first found itself at almost a year ago. The firm’s share price dipped above and below the $500 mark throughout early morning trading, and stabilized out at around the $503 mark after the opening bell.”

Michelle Maisto from eWeek commented, “Once, Apple couldn’t make devices fast enough to meet demand. Today, it appears consumers in developed markets are already tied to wireless contracts or are buying devices from competitors—or really, Samsung. After a stretch during which the Apple brand seemed untouchable, with not a realistic competitor in sight, Samsung came on fast and strong with its Android-running Galaxy line, first proving itself to be of Apple-caliber quality and cool, and then zooming past the iconic device.”

USA Today’s Matt Krantz added, “Meanwhile, analysts aren’t all that upbeat on Apple’s earnings announcement, due later this month. Analysts expect the company to earn $13.46 a share in the December 2012 quarter, down 3% from the $13.87 a share it earned in the December quarter of 2011, says S&P Capital IQ. And some analysts think those expectations might be too high.”

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