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Apple Stock Drops as iPhone Sales Miss Forecast

Analysts believe that the incredible growth run of the iPhone might be coming to an end, as sales figures missed the forecast of 50 million units

Analysts believe that the incredible growth run of the iPhone might be coming to an end, as sales figures missed the forecast of 50 million units

January 24, 2013 – Analysts believe that the incredible growth run of the iPhone might be coming to an end, as sales figures missed the forecast of 50 million units. Apple announced lower than expected sales for the smartphone, which underscored fears the iPhone, which helped to create the most valuable company in the world might be losing its unique allure.

The fourth quarter earnings report was one of the most anticipated of this earnings season. Apple reported no increase in profits along with slightly missing estimates in revenues. That suggests the company’s period of huge growth has come to an end. Once the news reached investors, the company lost over $50 billion in market value as its shares fell nearly 10% in trading after hours.

During the last quarter of 2012, Apple sold 47.8 million iPhone units missing the 50 million average estimate of analysts. What was unusual was the company was below the forecast of $54.9 billion in revenue with only $54.5 billion, while profits remained flat compared to last year at $13.1 billion.

Revenue in the Americas was up 15% for the quarter to $20 billion, but in Europe where the recession continues, signs have appeared that Apple’s rivals like Samsung might be gaining market share with handsets that are lower priced. Growth across Europe, which last year was 55%, dipped to 11% during the last quarter.

Apple shares have plummeted 30% since it reached $705.07, an all time high in September of 2012. Last week the stock dipped below the $500 mark for the first time in the past 11 months following a report that the company had reduced its orders for screens for the iPhone and iPad.

Apple also showed it was not immune to the worldwide fall in demand for PCs. Apple sold 4 million MACs during the quarter, which was 18% less than during the last quarter of 2011.

The iPad sold 23 million units, up from 15.4 million during the same quarter a year ago. Supplies for the mini iPad fell short of demand in every week since it went on sale.

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