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AAPL Stock: 102.99 ( + 0.52 )

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Apple shares down 7% on iPhone cutback rumor

updated 04:00 pm EDT, Tue July 31, 2007

Apple shares down 7%

Shares of Apple Inc. sunk nearly 7 percent during normal trading hours on Tuesday, falling to around $132 on volume of about 62 million. The primary driver for the declines is speculation by financial firm Miller Tabak & Co. that Apple will reduce its current production of iPhones from 9 million units to 4.5 million units, potentially indicating a reduction in sales targeting. Apple last week announced that it had sold 270,000 iPhones in the first two days of sales on opening weekend, nearly double the AT&T estimates of 146,000 activations, but well short of analyst expectations. The company did not back off its initial projections, however, maintaining that it will have sold 1 million iPhones by the end of its fiscal fourth quarter, and 10 million iPhones by the end of 2008.

During its fiscal third quarter conference call, Apple also said that it is on track to begin selling the iPhone in Europe during the fourth calendar quarter of this year, starting with a few major countries and expanding into other countries throughout 2008. Apple CFO Peter Oppenheimer also reminded investors that Apple has yet to see a dime of revenue related to payments from AT&T during the June quarter, but said that revenue will show up in the company's September quarter results.




by MacNN Staff

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Comments

  1. OtisWild

    Joined: Dec 1969

    0

    $299 for 8gb...

    Let's face it, iPhone really is about $200-300 overpriced.. It really needs to be subsidized, given that it's so tightly bound to ATT.

  1. doctor9

    Joined: Dec 1969

    0

    somewhat agree

    It will never be subsidized due to Apple's margins demand, nor will it come down $200-300 in price. But it should & could come down $100-150. Also, the introduction of a cheaper "nano" version would open the overall market.

    However, as an iPhone owner, I have no doubt it is worth every penny. There is the rub... if you own one, you don't know why someone wouldn't buy one.

  1. testudo

    Joined: Dec 1969

    0

    Re: $299 for 8gb...

    It is subsidized. AT&T already is paying apple some $200 for each iphone sold. Oh, you meant subsidizing it for users, not apple? Well, maybe without that, it would cost some $800?

  1. njfuzzy

    Joined: Dec 1969

    0

    Subsidy

    Subsidies don't make sense, when you make a very similar device that has most of the features, but isn't a phone.

    In other words, Apple can't charge $300 for the iPhone, and then charge $400 for the upcoming iPod, which will have a whole lot in common with it.

  1. listenhere

    Joined: Dec 1969

    +1

    unforseen circumstances?

    If Apple knew they were going to cut production and said nothing in or before their July 25 report, that would be criminal. 7% is a lot of money gone. There's a good chance this will spook investors and it will fall much further. The market's opinion of Apple counts. They had better explain this fast, if there have been any "unforseen circumstances" at all. Otherwise there is likely to be more bad news as the market reacts to this "bait and switch".

  1. bobolicious

    Joined: Dec 1969

    0

    Ransomed to data plans...

    ...may be a factor in slowing sales & while I'm sure this is part of the strategy to procure revenue streams it sure isn't helping sales - I'd buy an unlocked gsm version tomorrow if I could a la carte the services here in Canada...

  1. ZinkDifferent

    Joined: Dec 1969

    0

    The Sky is Falling....

    I certainly love the 'experts' in the investment market -- all speculating based on rumor and ignorance.

    a) There won't be a 'nano' iPhone. Get it in your skull. b) The moment the 2G version of the iPhone becomes available (i.e. the EuroVersion), 1G versions will become available on the Apple refurb store at $100 less than retail. At $399, and $499, the phone will appeal more. Once the stock depletes more, you should be able to see 1G versions at $299, and $399 through Apple's refurb store. c) The 2G phone will be sold for the same prices as today's phone, just may included upgraded hardware (i.e. 3G radio, better camera, etc...). It will also include new and updated firmware and applications - but those will be available to 1G phone users as well, via a software update.

    The European market, and later, the Asian market will explode the market for the iPhone, as those phone will add more features, which will trickle up to the US market, and will result in cheaper phones being made available via the refurb store.

    Haven't you folks figured out how this works, yet?

  1. jerryfrit

    Joined: Dec 1969

    0

    See Saw....

    Up on rumors, down on rumors...

    "Well short of analyst expectations" does not belie very solid...indeed, extraordinary numbers for a product launch like this. Looking at things realistically, the iPhone is a major success (and yes, I now have one and wonder where it's been all my life.)

    But all this hype and rumor, leading to swings of euphoria and panic, are making some short traders very happy.

  1. petsounds

    Joined: Dec 1969

    0

    SEC needs to investigate

    This is an "engineered" rumor, plain and simple, which was architected to drive down the cost of AAPL for a purchase opportunity. The SEC needs to crack down on this kind of rigged selloff by the major investment houses, as it hurts small investors.

    .com/apple/2007/07/bear-raid-wallo.html

  1. wymer100

    Joined: Dec 1969

    0

    Profit taking

    Some investors might have just been looking for a reason to cash out after the stock had been so high.

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