A steady slide in Apple Inc shares pushed the iPhone maker’s market value below US$2 trillion, the latest casualty in the tech stock rout.
Apple fell 3.7 percent on Tuesday, closing at its lowest since June 2021, as concerns about iPhone supply in the important holiday quarter mount and investors lose faith in a reprieve from higher interest rates.
The slump sent Apple’s market value to US$1.99 trillion, ending its reign as the last company to sport a US$2 trillion valuation after Microsoft Corp and oil giant Saudi Arabian Oil Co (Saudi Aramco) retreated last year.
Photo: AFP
The milestone marks a fall from grace for Apple. The stock spent much of the past year outperforming the S&P 500 Index, but has stumbled in recent weeks amid fears that iPhone production problems in China would ruin holiday sales, the company’s most important period.
Exactly a year ago, Apple’s shares briefly rallied to climb above US$3 trillion in market value as the S&P 500 hit a record high.
The four largest US technology and Internet companies lost more than US$3 trillion in market value last year, amid soaring inflation and slowing sales growth that surged during the COVID-19 pandemic.
Last month was Apple’s worst month since May 2019 with a decline of 12 percent, steeper than the 9 percent decline for the tech-heavy NASDAQ 100 in the same period.
Apple, based in Cupertino, California, has suffered supply disruptions stemming from COVID-19 lockdowns in China, but those have been easing. Manufacturing partner Foxconn Technology Group (富士康科技集團) has brought the world’s largest iPhone plant back to about 90 percent of anticipated peak capacity.
The Zhengzhou facility, known as iPhone City, produces the vast majority of high-end iPhone 14 Pro and Pro Max devices. In November, thousands of workers had fled or staged protests against extreme COVID-19 rules.
However, Foxconn ended most of those restrictions last month and offered more incentives for new and current employees.
Another Apple supplier, Murata Manufacturing Co, added a note of pessimism last month.
The company said it expected the tech giant to reduce iPhone 14 production plans further in the coming months.
The iPhone accounts for about half of Apple’s revenue.
“Judging by handset availability in stores, I see a downward revision happening,” Murata president Norio Nakajima said in an interview. “I hope that it won’t be too deep.”
Meanwhile, Nikkei on Monday reported that Apple has told several suppliers to make fewer components for some products, including AirPods, the Apple Watch and MacBooks, given weakening demand.
Apple is expected to deliver its latest quarterly earnings report in the coming weeks. The quarter that runs through last month is its biggest sales period of the year, and analysts had initially projected record-setting revenue.
Now they are predicting a slight decline to US$122.9 billion, according to estimates compiled by Bloomberg.
Underpinning Apple’s valuation is the hope that the company still has major growth opportunities ahead. Services have been a key area of expansion in the past few years and represent more than one-fifth of revenue.
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