Apple falls on lower shipment forecasts, muted China debut

Fri Dec 14, 2012 11:03am EST

An Apple logo is seen at the Apple Worldwide Developers Conference 2012 in San Francisco, California June 11, 2012. REUTERS/Stephen Lam

An Apple logo is seen at the Apple Worldwide Developers Conference 2012 in San Francisco, California June 11, 2012.

Credit: Reuters/Stephen Lam

(Reuters) - Apple Inc shares fell 3.9 percent on Friday after the iPhone 5 debuted in China to a cool reception and two analysts cut shipment forecasts.

Jefferies analyst Peter Misek trimmed his iPhone shipment estimates for the Jan-March quarter, saying that the technology company had started cutting orders to suppliers to balance excess inventory.

Shares of Apple suppliers Jabil Circuit Inc, Qualcomm Inc, Skyworks Solutions Inc, TriQuint Semiconductor Inc, Avago Technologies Ltd, and Cirrus Logic Inc also fell in early trading.

Apple shares have lost a quarter of their value since they hit a life high of $705.07 on September 21, as it faces increasing competition from phones using Google Inc's Android operating system.

Misek cut his first-quarter iPhone sales estimate to 48 million from 52 million and gross margin expectations for the company by 2 percentage points to 40 percent.

UBS Investment Research cut its price target on Apple stock to $700 from $780 on lower expected iPhone and iPad shipments for the March quarter.

The brokerage said it was modeling more conservative growth for the world's biggest technology company after making supply chain checks that revealed that fewer iPhones were being built.

"Some of our Chinese sources do not expect the iPhone 5 to do as well as the iPhone 4S," UBS analyst Steven Milunovich wrote in a note to clients.

Apple launched the iPhone 5 in China on Friday, a move widely expected to bring the Cupertino-based company some respite from a recent slide in market share in China, but early reports indicated that demand may not be as great as expected.

"The iPhone 5 China launch has been surprisingly muted but (we) are unsure how much weather (snow) or the required pre-ordering (to prevent riots) are factors," Misek said.

Apple shares fell as low as $508.50 in morning trading on the Nasdaq on Friday.

(Editing by Supriya Kurane)

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Comments (7)
Tiu wrote:
If you want bang for your buck… you’d buy something else.

Dec 14, 2012 3:36pm EST  --  Report as abuse
carlo151 wrote:
I am a geek and agree with Tiu, or used to. But on my wife’s last birthday I bought her an iPad2 and turned in my papers as her tech support person. PC after PC, Android pads, etc… it was always me installing, training and going into settings and getting blamed because of something she did (the married man blame game).
Since her iPad she has taken off running. Their hardware has been the gold standard of knockoff competitors, but the real show is software. Fast, self explaining and user oriented. I program in c# on a PC, I used a droid phone because I like to be in control of every setting. But the PC and droid are geek devices. Apple is for the user experience. If you add up the time you spend in confusion, then Apple saves you money, price is not everything, your time and frustration has value.

Dec 14, 2012 5:46pm EST  --  Report as abuse
HellcatM wrote:
May this be the beginning of a downward spiral for apple!

Dec 14, 2012 7:29pm EST  --  Report as abuse
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