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Apple Shares Fall 4%

Apple Shares Fall 4%Apple Shares Fall 4%

Apple Inc. fell in early trading after forecasting a sales decline for the first time in more than a decade, adding to evidence that the market for smartphones is becoming saturated and that expansion in China is no longer enough to maintain the company’s unprecedented run of growth.

Revenue in the first three months of the year will be $50b to $53b, Apple said Tuesday, the first quarterly drop since 2003 and below analysts’ estimates for $55.5b.

That follows a holiday quarter in which overall sales and iPhone shipments fell short of projections, reinforcing concerns that Apple is reaching the limits of iPhone growth and that a push in China won’t make up for a slowdown in the rest of the world -- a sentiment that’s fueled a stock slide of 20% in the past six months, Bloomberg reported.

While Apple remains immensely profitable -- generating a record $18.4 billion in net income on sales of $75.9b in the December quarter -- it’s no longer benefiting as much from the rapid adoption of smartphones around the world. Mobile-phone rival Samsung Electronics Co. also recently reported weaker-than-expected results.

Apple shares dropped 4% in early trading in New York Wednesday to $96.

 

Financialtribune.com