China, a country where many investors have been looking for Apple to generate growth, also is presenting challenges, according to BMO Capital Markets. While Apple said yesterday it sold 2 million of the iPhone 5 in the device’s first weekend on sale in China, the company isn’t likely to team up with China Mobile, that country’s largest wireless carrier, until the second half of 2013, BMO technology analysts wrote in a report, also reducing their estimate for iPhone sales to 165.5 million from 171.5 million for fiscal 2013. Samsung, which uses Google’s Android software and is Apple’s biggest smartphone rival, is advertising heavily in the U.S. as well as in Asia, according to the report.
“There’s increased competition,” North Shore’s Obuchowski said.
Analysts’ estimate cuts in recent days continue a trend started earlier this month. UBS AG cut its price estimate for the stock to $700 from $780 on Dec. 14, citing concern that growth may slow for the iPhone and iPad. Apple component suppliers have been receiving order cuts, according to Peter Misek, an analyst at Jefferies & Co. who cut his projection for the shares to $800 from $900 earlier this month.
Still, many analysts remain optimistic. Brian White of Topeka Capital Markets maintained his prediction that Apple’s stock will reach $1,111, citing prospects for iPhone growth in China. Maynard Um of Wells Fargo Securities published a report yesterday titled “The Mayan Apocalypse Is Not Upon Us,” saying concerns about Apple are overblown.
A key moment for determining whether Apple’s recent slide is justified will be the company’s first-quarter financial report in January, Obuchowski said. The three-month period from October to December will include the first full quarter of sales for the iPhone 5, as well as new iPads, Mac computers and iPods.
“We might very well find out that the fears were overblown, or we will find out that the company’s growth is beginning to slow,” he said.
The holiday period is typically Apple’s most lucrative -- last year, the company generated 30 percent of total revenue in the fiscal first quarter.