Apple stock plunge hits four-year record

Analysts cite everything from Jobs loss to capital gains
Apple stock plunge hits four-year record
Observers fear that Cupertino is out of ideas (Getty Images)
Published: 6 December 2012 - 11:36 a.m.
By: Stephen McBride

Apple Inc suffered a share-value dip of 6% yesterday, its largest single-day drop in four years, amid concerns of more robust competition in the mobility sector from rivals Samsung and Nokia, reported Reuters.

Apple's catalogue of recent woes include its analyst-projected loss in market share to Android-powered products and unconfirmed reports that at least one major stock-clearing house was raising margin requirements on Apple stock trades.

Apple also faces a hit from the feared increase in US capital gains tax that will take effect in the new year if Washington's "fiscal cliff" talks break down.

Apple also failed to reach agreement with China Mobile over distribution of its iPhones, a slip not made by Nokia. The Finnish handset maker negotiated a deal that will give its new flagship smartphone the Lumia 920 access to the largest consumer group in the world. However, it is unclear how much of a dent this will make in Apple's outlook. While China mobile has, according to CNET Asia, a 700m-strong subscriber base, it caters chiefly to less affluent users who are unlikely to pay the 4,599 yuan ($739) asking price for the Lumia smartphone. Nokia's market will be China Mobile's 69m 3G customers.

Analysts also point to Apple's lack of innovation. Even Apple co-founder Steve Wozniak expressed concerns that without the visionary aptitude of his former partner, the late Steve Jobs, the Cupertino-based firm is just "making the same machines".

"This is not going to be a short-term trend. This is a management test, of how well they can perform without Steve Jobs," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. Referring to Apple's new iPad mini, which is only a smaller version of the existing iPad, Battle said the company needs "another home run" for shares to return to levels around $700.


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