Apple slides to five-month low, uncertainty grows

Wed Nov 7, 2012 5:14pm EST
 

By Poornima Gupta and Edward Krudy

SAN FRANCISCO/NEW YORK (Reuters) - Shares of Apple Inc slid almost 4 percent on Wednesday to a five-month low as investors grew more uncertain about its ability to fend off unprecedented competition and untangle a snarled iPhone 5 supply chain.

Apple's slide outpaced the S&P 500's drop of about 2.4 percent the day after the U.S. election, putting the world's most valuable technology company into bearish territory.

Long a mainstay of many fund portfolios, Apple on Wednesday lost 20 percent - $130 billion of its market value - since hitting a record high in September. A 20 percent slump signals a bear market for a stock to Wall Street.

Fund managers cited fundamental concerns about iPhone 5 supply and intensifying competition from resurgent rivals such as Samsung Electronics and Amazon.com Inc, as well as profit-taking after the elections.

Global shares fell with investors worried that the deep fiscal challenge facing President Barack Obama after his re-election could lead to a new recession.

Apple's share price drop since September comes on the heels of torrid growth since the introduction of the iPhone in 2007 and the iPad in 2010, which upended the PC industry and carved out a new device segment.

But many investors question whether it can keep innovating and keep ahead of ever-more aggressive competition under new CEO Tim Cook and his chief lieutenants, installed after the death of its chief visionary and co-founder Steve Jobs last year.

Cook last week ousted veteran mobile software chief Scott Forstall - a protege of Jobs' - in a surprise move seen as a loss of one of the company's most valuable assets.   Continued...

 
The Apple logo hangs in a glass enclosure above the 5th Ave Apple Store in New York, September 20, 2012. Apple's iPhone 5 goes on sale tomorrow. REUTERS/Lucas Jackson