By Adam Satariano and Selina Wang
(Bloomberg) — Apple Inc.’s investors are spooked.
The shares ended the day below $100 for the first time Thursday since October 2014 amid concerns that demand is waning for iPhones, the most critical piece of the company’s business. The stock’s steady drop in recent weeks coincides with analyst and media reports indicating that Apple has cut back production of new handsets within its supply chain to accommodate slowing sales.
More than 60 percent of Apple’s revenue comes from the iPhone so any sign of weakness for the product causes concern among investors. The company’s reliance on the handset has only increased over the past year, as sales of the iPad have declined and the Apple Watch has yet to become a mainstream hit.
The stock fell 4.2 percent to $96.45 in New York. Apple, the world’s most valuable company, has lost about $52 billion in market capitalization this year.
“It’s a cause for concern,” says Jack Ablin, the chief investment officer at BMO Harris Bank, which owns Apple shares. Even with the slide, he said Apple is still a good value. “It’s been a phenomenal growth story and we’re hoping the growth will continue.”
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Apple, which reports financial results for the holiday quarter on Jan. 26, has fallen 18 percent in the last month. Analysts at UBS and RBC Capital Markets lowered their estimates for iPhone sales Thursday, following similar moves by Morgan Stanley, Credit Suisse, JPMorgan and Drexel Hamilton.
Analysts attribute the iPhone slowdown to the saturation in the broader smartphone market and less need for people to get new handsets. Apple also is in a period of its typical business cycle before it releases a newly designed iPhone, which usually rolls out around September. Cupertino, California-based Apple faced similar pressure from investors in 2014 before the debut of the bigger-screen iPhone 6 and 6 Plus.
