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