Apple's shares swallow biggest loss in 4 years

Dec 06 2012, 11:53 IST
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Apple Inc  shares tumbled more than 6 percent on Wednesday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market.  (Reuters) Apple Inc shares tumbled more than 6 percent on Wednesday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market. (Reuters)
SummaryApple Inc shares tumbled more than 6 percent on Wednesday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market.

the tablet computer space in 2012. Its worldwide tablet market share will slip to 53.8 percent in 2012 from 56.3 percent in 2011, while Android products would increase their share to 42.7 percent from 39.8 percent, IDC said.

Concerns that tax rates on dividends and capital gains may rise next year were also cited as contributing to the Apple sell-off.

The stock's massive market value meant Apple was almost single-handedly responsible for Wednesday's 1.1 percent decline in the Nasdaq 100 Index. Apple is still up 33 percent this year, but is down nearly

24 percent from its record high of $705.07, hit on Sept. 21. The stock slid more than 6.4 percent on Wednesday to close at $538.7923.

BEFUDDLING SLIDE

Some analysts were perplexed at the fall from favor in Apple stock, which has been a staple in almost all growth portfolios. The company is expected to deliver reliably high revenue and earnings expansion for years to come, and one in two tablets sold globally remains an iPad. It is now gearing up for the introduction of its latest

iPhone 5 and iPad mini in international markets. It will begin selling the iPhone 5 in 50 countries in December, including China and South Korea.

"Apple stock is significantly more volatile than its earnings and innovation stream," said Daniel Ernst, analyst with Hudson Square Research. "And yet the wind blows slightly from the south instead of the east one particular morning, and the stock is down 6 percent."

"It makes no sense. There are lines around the block for their products all around the world," he added. "No other company has that."

Separately, Nokia said it will partner with China Mobile, in a sales deal that will give the Finnish company an

opportunity to win back Chinese market share from Apple's iPhone.

But some analysts continue to believe the dominant carrier in the world's largest cellular market will eventually embrace the iPhone as well.

"China Mobile already carries multiple smartphones from multiple vendors. We continue to expect China Mobile to add the iPhone in the back half of 2013," Piper Jaffray's Gene Munster wrote in a research note.

While lines for the latest iPad model appeared lighter than usual when it hit stores in November, Apple said at the time that demand was so strong that it "practically sold out of iPad minis." It sold 3 million of the new iPads -- including the full-sized version -- in the

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