Apple shares fall below $400 mark

Written By Unknown on Kamis, 18 April 2013 | 20.24

17 April 2013 Last updated at 21:00 ET

Shares of Apple dipped below the $400 mark for the first time since December 2011 amid concerns over slowing sales.

Its shares fell as low as $398.11 in Wednesday trading, before ending the day down 5.5% at $402.80.

The concerns were triggered after one of its suppliers, Cirrus Logic, which makes sound components for the iPhone and iPad, reported a decline in sales.

With Apple due to release its latest quarterly results next week, some fear the numbers may be underwhelming.

According to various estimates, demand from Apple accounts for nearly 90% of Cirrus's revenue.

Michael Yoshikami, a portfolio manager at Destination Wealth Management, said that Cirrus's warning makes it more likely that "Apple's not going to surprise on upside".

Under pressure

Apple which enjoyed tremendous success in recent years, has been facing increasing pressure lately, both from rivals as well as investors.

Continue reading the main story

There's not a lot of conviction about what the second half is going to look like"

End Quote Shannon Cross Cross Research

While the sales of its popular iPhone and iPad have grown - they have fallen short of market expectations - and its market share has been declining.

At the same time, its biggest rival Samsung has been steadily increasing its market share, both in the smartphone and tablet PC sectors.

According to research by Gartner, in the final quarter of 2012 Samsung sold 64.5 million smartphones to Apple's 43.5 million.

Samsung also doubled its share of the tablet PC market to 15.1% in the last three months of 2012, while Apple saw its share slide to 43.6% from 51.7%, despite seeing a jump in sales, data released by IDC earlier this year showed.

At the same time, some analysts have also been disappointed over the delay in launch of new products by the company.

There are rumours that the release of the company's next iPhone may not be until September, rather than in June as had been earlier expected.

To add to its woes, a brand survey released by consultancy Added Value in March showed that Apple is perceived as less "inspiring" than it was three years ago.

Meanwhile, Samsung is now seen as equally inspiring in the US.

That has led many investors to fear that Apple may be losing its dominance and as a result its revenues and profits may be hurt.

"There's not a lot of conviction about what the second half is going to look like," said Shannon Cross of Cross Research.

All these concerns have seen investors ditch Apple's stock. Its shares have fallen more than 40% since hitting their peak in September 2012.


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