Apple (AAPL) stock opened down almost 4% this morning, and after briefly dipping below, it is barely keeping the share price above $500. The drop comes on the heels of news that Apple has cut orders for certain components of its popular iPhone 5.
Reuters, citing The Nikkei, claims Apple has asked suppliers of the phone’s LCD screen to cut their order of 65 million roughly in half for the coming quarter.
Sources familiar with the move told the Wall Street Journal that the Cupertino computer giant spoke with suppliers sometime in the last month and scaled back orders after demand for their latest smartphone failed to live up to the company’s expectations.
Related: Has Apple Lost Its Genius?
Apple is set to report Q4 earnings on January 23rd and iPhone 5 sales are sure to be a big part of those numbers. The phone’s sales started strong, with consumers grabbing a reported 5 million of the gadgets in the first weekend it was available in September. Still, several analysts said it would take a few months to see the true impact of iPhone 5 sales on the company. It would seem a clearer picture of the phone's success, or lack thereof, has now emerged.
While the latest news sent shares lower, the stock has been troubled for some time now, down 25% from its all-time high of $705 reached last September.
Kyle Harrington of Harrington Capital Management admits the company has lost some of its competitive edge. “They’ve gone more commercial and as a result the stock price has suffered,” he says, adding, “it will be very interesting [to watch] in the coming months, just how much passion and innovation they come out with to see if the luster is still there.”
Apple's grip on the smartphone market has been slipping of late. On Monday chief competitor Samsung reported sales of its Galaxy S phone line have topped 100 million worldwide. With Samsung and Google (GOOG) nipping at Apple’s heels, it has become even more important for Apple not to disappoint. While rumors of new gadgets from Samsung abound, Apple is said to be readying the next iteration of the iPhone, iPad and iPad mini. In addition, speculation abounds regarding possible new products such as the “iWatch” and “iTV.” But are these new items enough for Apple to get its groove back? Let us know on our Facebook page.