Market Overview

Apple Drops on iPhone Demand Concerns

Apple Drops on iPhone Demand Concerns

Shares of Apple (NASDAQ: AAPL) dropped over 4 percent in premarket trading on Monday after The Wall Street Journal said that the Cupertino tech giant had slashed orders for iPhone components.

Analysts at UBS defended Apple to some extent, calling news of iPhone component order cuts old news. Shares of Apple rallied back on these comments to some extent, but remained down over 2.5 percent early Monday.

Concerns about demand for the iPhone 5 have plagued Apple shareholders in recent months, with several analysts making comments about upstream suppliers seeing tepid demand.

The iPhone may be getting pressured from rival smartphones, notably Samsung's Galaxy S3. Mark Cuban told BGR that his Nokia (NYSE: NOK) Lumia 920 crushes the iPhone 5.

As the vast majority of Apple's profit comes from the iPhone, any weakness in iPhone demand could send the stock sharply lower.

Analysts at Bernstein said on Monday that the company should consider raising its dividend, and if necessary, take on debt to do so.

At any rate, investors will get a good take on iPhone demand when the company reports earnings on January 23.

Posted-In: Analyst Color News Intraday Update Analyst Ratings Movers Tech Trading Ideas Best of Benzinga


Related Articles (AAPL + NOK)

View Comments and Join the Discussion!