Apple Share Price Falls Most in Four Years

on Dec 6, 2012

On Wednesday 5 November Apple (NASDAQ:AAPL) witnessed the biggest drop in its share price since December 2008 – the stock slid by 6.43 percent or $37.05, slashing about $35 billion off the market capitalisation of the world’s most valuable company.

**Why The Share Drop?**
Reuters reported that investors and analysts are citing a number of reasons for this week’s share slide. On Wednesday research firm International Data Corp (IDC) said that the iPad and iPad minis will cede some market share to devices running Google’s Android operating system for the full year. According to the company Apple’s worldwide tablet market share will fall to 53.8 percent for 2012 from 56.3 percent in the previous year. At the same time Android products will increase their share from 39.8 percent to 42.7 percent. Additionally Windows 8 and Windows RT tablets will chip some sales away from the iOS and Android models and are expected to account for 2.9 percent of the market in 2012 and 10.2 percent in 2012.

Another concern for investors is the prospects of rising tax rates on capital gains and dividends next year as a result of the fiscal cliff. This led some shareholders to sell off portions of their long positions in Apple’s stock, which has seen its price rise by 33 percent since the start of the year. “Some taxable investors take the gains, that creates some negative momentum, institutional investors are heavily weighted the stock and reduce exposure.” opined Tim Ghriskey, chief investment officer of Solaris Group, as quoted by Reuters.

!m[Analysts Find it Hard to Pin Down Exact Cause for Stock Plunge](/uploads/story/980/thumbs/pic1_inline.png)Analysts also believe that the share sell-off on Wednesday was partially triggered by fears that Apple will lose ground to Nokia’s smartphones in China as a result of China Mobile, the country’s biggest mobile carrier, agreeing to carry the Lumia 920T. Apple has signed agreements with the other two large operators – China Unicom and China Telecom – but is yet to strike a deal with China Mobile. Gus Papageorgiou, an analyst with Scotia Capital, told Bloomberg that he believes the iPhone 5 will eventually be available on all three mobile carriers but the launch is likely to be postponed close to the Chinese New Year.

**Apple and Samsung Patent Feud**
A hearing is scheduled today in front of US District Judge Lucy H. Kohn in which Apple is expected to seek injunction on US sales of at least 25 Samsung phones and tablets. According to the iPhone-maker, the South-Korean company’s benefits from using Apple’s patents outweigh the $1.05 billion (£653 million) award the jury issued in August. Judge Koh should increase the penalty by an additional $536 million (£333 million) because Samsung “intended to take Apple’s market share by deliberately copying the iPhone design,”

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On the other hand Samsung argues it deserves a whole new trial because the jury foreman allegedly lied about lawsuits he was involved in, which may have resulted in a faulty verdict. The South-Korean company is asking Judge Koh to overrule the jury’s findings on the grounds that patent law should protect only original designs, not general concepts.

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