Reported supply cutback and upcoming results all add to fears
Apple shares dived to their lowest point in almost a year last night [14th January 2013] amid reports the company had cut orders for iPhone parts, further spooking investors already jittery about the outcome of next week’s Q4 2012 trading results.
Analysts fear the iPhone maker will post a year-over-year decline in earnings for the first time in a decade as margins are squeezed by the increasing number of rival devices available.
“Many investors now feel the bloom is off the rose and that they have to trade Apple as if it’s a normal company now,” commented JJ Kinahan, chief derivatives strategist at TD Ameritrade.
Though early reports from US mobile carriers point to strong sales of the iPhone 5 before Christmas, only yesterday key rival Samsung was celebrating sales of more than 40 million Galaxy SIII smartphones since its May 2012 launch, an average of 190,000 units a day.
Despite yesterday’s slump in Apple’s stock which saw it close at $501 compared to $700 in September, the Cupertino manufacturer remains the largest and most influential firm in the S&P 500, with a market value of $475 billion. But its shares now make up just 3.6 per cent of the benchmark, a far cry from its peak of close to 5 per cent of the index last year.