Apple Inc (AAPL) shares declined the most in almost four years on Wednesday on concern that the company will lose ground in smartphones to Nokia Oyj (NOK1V) in China while giving up market share to Google Inc (GOOG) in tablets.
Apple fell 6.4%, the biggest drop since Dec 17, 2008, to $538.79 at the close in New York. The decline erased US$34.9 billion from Apple's market value, the steepest loss since at least 1988, according to data compiled by Bloomberg. The stock has advanced 33% so far this year.
China Mobile Ltd, China's largest wireless carrier, agreed to carry the Lumia 920T, a device based on Microsoft Corp's Windows Phone 8 software, the companies said in a statement. Though Apple has agreements with China Telecom Corp and China Unicom (Hong Kong) Ltd. to sell iPhones, the Cupertino, California-based company hasn’t yet forged a deal with China Mobile in the world’s largest mobile-phone market.
"Nokia announced that they are launching one of their Lumia phones with China Mobile, and there was some hope that Apple would launch their iPhone on that network," Gus Papageorgiou, an analyst with Scotia Capital Inc in Toronto, said in an interview. "I think they still will, but they'll probably launch closer to Chinese New Year."
China's next lunar year begins Feb 10.
Apple's slide also may be the result of traders predicting a drop after the stock failed to sustain a recent rally, a "classic technical breakdown," according to Gene Munster, an analyst at Piper Jaffray Cos.
Munster said new so-called margin rules also may have been put in place by some investors that could limit how many Apple shares a firm can own. Investors may also be disappointed Apple is not issuing a special dividend like Oracle Corp (ORCL), Wal-Mart Stores Inc (WMT) and other US companies, he said.
Apple is trading at a 39% discount to the Nasdaq Composite Index on a price-to-earnings basis, slipping from a discount of about 5% on Sept 21, when the stock touched a record high of $705.07.
In another announcement that may have fueled the stock slide, research firm IDC said in a report yesterday that Apple’s share of the tablet market will slip to 53.8 percent this year from 56.3% in 2011, while Google's portion will advance to 42.7% from 39.8%. Apple's tablet share will slip to less than 50% by 2016, as total global tablet sales more than double to 282.7 million units in four years as consumers increasingly shun personal computers, according to IDC.