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

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 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.

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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.