Apple shares dipped below $400 (£262) yesterday marking a 16-month low for the manufacturer as growing concern suggest the company may miss revenue targets.
For the first time since December 2011, during trading yesterday Apple’s stock fell below $400 (£262), but managed to close at $403 (£264). Last September, Apple shares soared as high as $705 (£462).
The share price dip was due to one of Apple’s suppliers issuing a trading update suggest sales of iPhone and iPad devices were potentially lower than expected and would be revealed in Apple’s report results for March that are to be revealed next week. Analysts also warned that Apple’s trading figures could be rather weak.
Cirrus Logic, a Texan company that makes audio chips for Apple smart devices and relies on Apple for 90 per cent of its business, reported that its first quarter revenue was around $27 million (£17.7 million) down from what it should be, coming in at $170 million (£111 million).
“This is a tough environment,” said Michael Yoshikami, a portfolio manager at California-based Destination Wealth Management, which owns about 50,000 Apple shares. “Apple is in transition between products.”
“We blame Apple for losing its mobility mojo,” said Vernon Essie, an analyst at Needham & Co, in a note. “This was simply an inventory overbuild for the iPhone 5 relative to Apple’s forecast.”
Citi and Jefferies bank analysts are watching Apple and predict the Cupertino company could fail to reach its own revenue goal of around $41 – $43 billion (£26.9 – £28.2 billion) for the March quarter. This could potentially be the first significant decline in income since 2003.
Apple has enjoyed tremendous success in recent years, but is facing increased pressure from its investors and rivals such as Samsung.
Sales of the iPhone 5 and iPad mini have helped to solidify its position as one of the market leading smart devices manufacturers, overall sales have still failed to reach targets and thus Apple’s market share is declining.
Samsung recently overtook Apple as the global leader in the smart device market, gaining a 20.8 per cent market share over Apple’s 18.2 per cent in February.