Apple shares decreased by four percent on Wednesday to a five month low as investors grow uncertain about its ability to fend off competition as well as concerns about management and the company’s supply chain.
The drop was more than the S&P 500’s decline of around 2.4 percent resulting from the US election on Tuesday.
The iPhone manufacturer has now lost 20 percent, around $130 billion, since shares hit a record high in September. Shares in the world’s most valuable company have been a staple in many fund portfolios, but managers are losing confidence.
Its share in the worldwide tablet market dropped to just over 50 percent during the third quarter of 2012, as rival devices from Amazon, Google, Samsung and Microsoft made an impact. There has been great interest in the iPhone 5, but Apple has had problems meeting demand, with supplier Foxconn saying that it was having trouble.
The seven-inch tablet market is especially competitive, with Apple releasing a slightly larger 7.9-inch device as a response to growing demand for the form factor. It announced that it had sold three million iPad Minis and fourth generation iPads during their first three days on sale, but did not give specific sales figures.
Investors are querying whether or not Apple can continue to innovate, especially under its new CEO Tim Cook. Last week, Cook fired Scott Forstall (once seen as a successor to Steve Jobs) over the disappointing launch of Apple Maps, which debuted in iOS 6.
There was further embarrassment for the company this week, when a judge ordered it to post a revised acknowledgement of a court ruling that Samsung did not infringe Apple patents relating to the iPad. The court said that the original statement was “untrue” and “incorrect”.
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Guess for investment fund managers its like discovering there really isn't a Father Christmas!
Even so, a company that has 50% of the world for tablet and number two market share for smartphones - it's not bad!