Apple shares briefly dipped below $400 on Wednesday, hitting their lowest level since December 2011. Apple closed at $402.80, down 5.5 percent, after one of its key suppliers issued a disappointing forecast.
Cirrus Logic announced that its gross margin is likely to drop to 40.4 percent, well below its own guidance of 50 to 52 percent. Due to Cirrus’ strong ties to Apple, the market went into a fit and a flash selloff ensued.
Apple’s market capitalisation is now $380, a few billion dollars short of Exxon. Apple hit its all-time high of $705 back in September, but it has been downhill ever since. Although quite a few analysts claimed that Apple would hit $1,000 by the end of 2012, it is clear that Wall Street’s love affair with Cupertino is nearing an end.
Many investors fear that Apple’s new leadership simply lacks the vision of Steve Jobs and that the company won’t be able to come up with innovative, game changing products. This of course is rubbish. Apple is still in the game and it has some of the best and brightest designers and developers on its payroll. It is not a one-man show.
However, the company is in the middle of a dry spell. No new product has been announced since the iPad mini and it will be at least a couple of months before we see a refreshed iPad or new iPhone. Competition from the Android alliance is getting stronger and Apple needs to pull a rabbit out of the hat soon.
