Apple shares dip below $400 as iphone chip glut reported
Sales could be short of expectations
SAN FRANCISCO — Apple Inc. dropped below $400 for the first time since December 2011 after one of its audio-chip suppliers, Cirrus Logic Inc., reported an inventory glut that suggests iPhone sales may fall short of analysts’ expectations.
Apple’s shares declined 5.5 per cent to close $402.80 in New York on Wednesday, after earlier touching $398.11, the lowest intraday price since Dec. 22, 2011.
Cirrus, which makes sound components for the iPhone and iPad, is an indicator of demand for Apple’s topselling products, according to Peter Misek, an analyst at Jefferies & Co.
“We blame Apple for losing its mobility mojo,” Vernon Essi, Jr., an analyst at Needham & Co., wrote in a research report on Wednesday. “This was simply an inventory overbuild for the iPhone 5 relative to Apple’s forecast.”
Apple’s stock has fallen more than 40 per cent from a record in September amid concerns about slowing profit and sales, narrowing margins and intensifying mobile competition. While the iPhone is the top-selling handset, Samsung Electronics Co. has become the leading overall provider of smartphones by introducing a variety of devices with different designs and prices.
“Apple is reducing expectations,” Misek said in an interview.
After Apple on Jan. 23 reported its slowest profit growth since 2003, more than 20 analysts lowered their price targets, according to data compiled by Bloomberg. Wednesday’s stock slump was the biggest since Jan. 24, when Apple tumbled 12 per cent following the earnings report.
For the fiscal second quarter, which ended in March, they’re predicting an 18 per cent decline in net income to $9.5 billion — the first decrease since 2003.
The results may be even worse that those expectations, according to Toni Sacconaghi, an analyst at Sanford Bernstein & Co. He lowered his iPhone estimate for the quarter, which ended in March, to 34.2 million units, from 35.2 million.