Apple shares tank below $500 mark on weak iPhone 5 demand report

Apple shares tank below $500 mark on weak iPhone 5 demand report

Summary: Apple's share price tanked to a new low today after a report said the company had cut its component orders for the iPhone 5 after weaker than expected demand.

Screen Shot 2013-01-14 at 09.32.04
$AAPL below $500 per share mark at 9:32 a.m. ET on January 14, 2013. Screenshot credit: ZDNet.

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.

A report by The Wall Street Journal confirmed what many other analysts had already been saying, that the Cupertino, Calif.-based technology giant has reduced its iPhone 5 component orders after demand for the next-generation smartphone was weaker than expected. The Journal cited unnamed sources.

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Apple slashes iPhone 5 component orders

Apple slashes iPhone 5 component orders

Apple has cut back orders for iPhone 5 components according to the Wall Street Journal, signalling its expectations for the iPhone 5 may have been too high.

During the first 24 hours of the smartphone going on sale back in September, pre-orders for the iPhone 5 were off the charts, pegging in at 2 million pre-orders during the first day. Thanks to the inclusion of 'international' 4G LTE connectivity, the smartphone's popularity grew across the Atlantic to Europe and Asia. Apple even made a break for it in China, where the device is popular but has yet to really make its mark. China already contributes around 15 percent of Apple's revenue.

Since then, however, the report suggested that because of expected poor demand for the January-March quarter, the iPhone 5 screen order has been cut by half, according to sources speaking to the paper. ZDNet's Liam Tung has more.

According to research firm IDC, Apple held more than 14 percent of worldwide smartphone shipments during the third quarter of 2012, from a peak of 23 percent during the December holiday quarter of 2011. 

Apple will report its first quarter earnings in just over a week's time on January 23, which will include the company's December holiday sales figures. According to Fortune, analysts predict that Apple will sell a median of 49.5 million iPhones during the previous quarter, whereas Apple is estimating a slightly lower and more modest 47.8 million -- a year-on-year growth of 39 percent.

We've put in requests to Apple for comment, and will update if we hear back. 

Topic: Apple

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  • I'm surprised

    For a while, it seemed like AAPL couldn't go below $500. It had reached the brink a couple times, and bounced right back. This may be the case again here, but this kind of news is not good.
    • Might be a good time to buy

      as some claim that Apple is undervalued at 500.

      But then again, many investors just want that quick profit, so they may not want to wait until Appple reports quarterly earnings, which will still be very good.
      William Farrel
      • Bad signs and more bad signs for Apple

        This kinda news has been rumored for a while. Apple fans will still try to deny the truth. Apple expanded to world wide distribution because of poor demand in US (or else they wouldn't have had the supply). At this point if Apple had good news they would announce it (if the sales figures were not that bad, etc.).
      • this is not a quick profit

        Quick profit taking would have been done many months ago. I suspect for the past 20+ months, the investors pumped the price, sold, bought back in, rinse and repeat. And for those 20 months it was a good cycle but all stock cycle like this ends in the same way. I've warned people before iphone 5 that they should start pulling out of aapl from their portfolios. I dumped everything when it couldn't hold at $650 because I made a nice profit and I wasn't going to be greedy. Those who are selling now and those caught off guard. If they were going to sell off they should have done it in dec before the capital gains tax. This leads me to think these guys are mainly in denial and/or only made a small profit or a small lost. And therefore is willing to gamble. But this news scared them off.

        One can also believe that the insiders are doing the reverse and dumping the expectation and share price down now to buy in because they anticipate better than expected results next week. Personally, I wouldn't make that gamble because there is still $500/share to lose. Y'all are better off jumping into nokia. Big up turn potential with a smaller per share risk.
  • The 'Analysts' predicted $1000.

    The graph never goes straight up and stays there, it will always come down to the spot where it belongs, Apple will not maintain a steady graph without the strong presence in Enterprise. iProducts are attacked by Samsung and MS Surface...
    • Agreed

      I think those sorts of things are very much at play here. Normal, competitive market forces and a fickle consumer base. Did anyone really think monsters like MS, Samsung, Nokia, etc. would just sit back and let Apple have its day forever?
    • Apple stock price could reach $1000 but

      For Apple to be able to increase their stock price to $1000 they need urgent help from a good visionary man like Steve Jobs.

      With their current management, Apple is being seen as a greedy company which lost the track of innovation to move millions of consumers to their shops.

      Apple magic has been lost without Steve Jobs. But not everthing is lost, Steven Sinofsky is not working in Microsoft anymore, hiring him could bring new innovation to Apple.
      Gabriel Hernandez
  • I hate when 'journalists' just copy and paste articles

    For a more thorough analysis of this story, with explanations of why this could be pure propaganda, read here:

    Remember, analysts use Apple as a 'slingshot' stock. They pull it down so they can buy it cheaply, then let it rise. Lather, rinse, repeat.

    The strange thing is, the title of this blog says 'tanks'. If the readers here of this forum had purchased apple when I last suggested it, when the iPad was about to come out and it was at $195, they still would've more than doubled their money. Not a bad rate of interest!
    • Would've, could've, and should've

      We'd all be rich! I bought mine at $90/share, got out at $638/share.
    • macdailynews is trying to put a positive spin on this? Say it ain't so.

      Shocking. Unexpected.

      But there is a bigger question here. Why is macdailynews trying to put a positive spin on this? Why do they care so much about apple's stock price?

      - The stock price does not affect the owners of apple products. Does it?
      - apple fans are more than welcome to purchase the stocks of other, better performing companies (like Nokia). Aren't they?

      So why is it SO important for macdailynews to attempt to put ANY spin on apple's stock price? Is it because they know their readers would feel bad about themselves if these numbers weren't spun? That leads to a bigger question. Why would macdailynews readers feel bad about themselves based on how "good" or "bad" apple's stock price is?
      • So why is it SO important ...

        for you to put a positive spin on MS news or play up negative news about MS competitors?

        Why don't you answer THAT question?

        And why would you expect "macdailynews" to be fully objective in any event? Are you dumb, naive or just a MS shill lacky, or perhaps all three?
        • Don't think I have

          You may disagree. That's allowed.

          "And why would you expect "macdailynews" to be fully objective in any event?"

          Um, I didn't. That was actually my point.

          However, the more interesting question is WHY macdailynews isn't objective about the stock price specifically. I can understand if macdailynews tried to spin the latest malware attack on os x because that DOES affect apple users. But the stock price doesn't affect apple USERS so it is an odd thing for macdailynews to attempt to spin. There is no need to be unobjective about the stock price of the company that pays other companies to manufacture the products you have purchased. It makes no sense.
          • investors have a different priority than users

            but there is overlap. Investors and users look to future sales, product launches, product availability, development plans, supply chain management issues, and other indicators as signs of what is going on with a company. Stock price does affect users because growth and success in the stock market generally relates to a strong product line, while a decline in price means a number of marginal products (often with small but devoted fan bases) are likely to be slashed.

            I don't read macdailynews. I don't own a mac. I do, however follow a number of companies whose products I do use. It isn't surprising that Mac fans want to see a little positive spin.
          • The one sentence your whole post relies on is wrong

            "Stock price does affect users because growth and success in the stock market generally relates to a strong product line, while a decline in price means a number of marginal products (often with small but devoted fan bases) are likely to be slashed."

            This simply isn't true. The stock price is based on what investors are willing to pay for a stock. Nothing more, nothing less.

            But let's examine this in a bit more detail:
            "growth and success in the stock market generally relates to a strong product line"

            So users shouldn't examine the products on the market and decide which is best for them? Instead, they should look at the stock price and then decide which product is best for them? Ridiculous. A product that is a strong product for me doesn't become stronger or weaker based on what other people think of it, ESPECIALLY not if those other people are investors. We have been told this lie for years from apple fans. "apple products must be good, look at the stock price". I buy products based on whether or not they are good for ME, not based on whether or not the company that pays other companies to manufacture their goods have exceeded the expectations of a bunch of other people who are bartering over pieces of paper (stocks) that don't even physically exist anymore.

            "while a decline in price means a number of marginal products (often with small but devoted fan bases) are likely to be slashed"

            This isn't even remotely true. A stock price can fall because, for example, iphones are expected to only make $50 billion in profits instead of $100 billion in profits. A falling (or stagnant) stock price is completely unrelated to profitability. It is more related with expectations of growth. You don't kill a profitable product line just because the growth in another product line is below expectations. Likewise, you don't keep a product line around just because the growth in another product line is above expectations and your stock price is soaring.

            The stock price has marginal effect on the end user.
        • Wow! You're asking TB3 to answer a question

          I've asked you, but can't remeber you ever answering!

          What's with the love fest you give to other MS bashers, yet call anyone who supports MS "dumb, naive or just a MS shill lacky"? Like they can't be intelligent AND prefer to use an MS product when it suits their need? What's with your mindset that only someone paid by MS would ever say something good about their products?

          What's your real deal? You can't just get joy out of mindless MS bashing? That makes no sense.
          William Farrel
      • invest wisely

        This is the #1 reason why I never buy stocks of companies whose products I love. It taints your judgement and you become emotionally invested. That should never be the case when it comes to pure unadulterated evil greed. Your goal is to make money and market forces does not align well with new products. The market reacts almost always on anticipated news not established products.
    • Wait - that would be illegal and get you thrown in jail, wouldn't it?

      "analysts use Apple as a 'slingshot' stock. They pull it down so they can buy it cheaply, then let it rise. Lather, rinse, repeat"

      Please, and you think the SEC would allow this?

      To purposely (fraudulently) pull down a stock price for the intent of purchasing low, then selling at a profit is illegal. Says so right in the SEC guidelines. Insider trading is illegal, too
      It's called manipulating a stock, which is most definatelly NOT allowed.

      It's just some little thins that get the analysts and traders thrown in jail.

      Never heard the term "slingshotting a stock". Even did a search, saw nothing. Post a link to that term showing the legality of it, and get back to us, as it's really sounds like a lame attempt at an excuse on your part, as doing that is clealy illegal.
      William Farrel
      • Ever notice this?

        When apple's stock price goes up, it is because:
        "Apple producing products that people WANTED."

        When apple's stock price goes down, it is because investors are big meanies.
  • So by YOUR logic

    If he's "CockGobbler3" then YOU must be "CockGobbler7"... they say the sequels always suck more than the original... and you've certainly proven that saying to be right "seanconnery007".
    • CockGobbler3?

      By the dot next to your reply, I'm taking it "cloggedbottom7's" was deleted. Sounds like he's now trying to make up a name for toddbottom3 because I've given him one, and he's totally convinced himself that TB3 is me, which he's not.

      He has no idea how hard I laugh at him for that - to be so sure, and yet to be so wrong.

      "CockGobbler3"? That's the best he can do?

      That's just so lame.
      William Farrel