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Apple shares plummet after low sales

Apple shares drop 10 percent after quarterly results point to slowing growth for the first time in five years.
Last Modified: 24 Jan 2013 18:48
Apple Inc is still the world's most valuable company, a position it's held for more than a year [Reuters]

Apple shares have plunged after the company reported quarterly results that point to growth slowing after five runaway years.

Apple stock was down $53.55 or 10 percent, at $460.46 in midday trading on Thursday.

Apple's market value dropped as disappointing results, due to weak holiday sales of its iPhone, sent its shares plummeting.

Apple Inc is still the world's most valuable company, a position it has held for more than a year.

Mike Binger, portfolio manager at Gradient Investment in Shoreview, Minnesota, said that people had began "gravitating towards other stock".  

"Apple has been topping the headlines for the last three to four years. That phase is obviously past us and people are
starting to talk about different stocks and they are gravitating towards different stocks."

Smartphone boom

Late on Wednesday, Apple reported October-December earnings that were flat compared to those of the previous year.

Sales grew by 18 percent from the year before, but the startup of production lines for multiple new products like the iPhone 5 and iPad Mini held back profits.

Of more concern to investors is Apple sales growth forecast for the current quarter of around seven percent - far from the 50-percent-plus rate it has often hit in recent years.

Apple usually issues underestimated forecasts, but Chief Financial Officer Peter Oppenheimer indicated that the company was moving toward providing more realistic figures from now on.

Analysts believe Apple is unable to fully capitalise on the global smartphone boom with just one new - and very expensive - phone model every year.

There has been speculation among company-watchers that Apple may launch a cheaper iPhone, or a premium model with a bigger screen, but these reports remain unverified.

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Source:
Agencies
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