“Apple Inc. (AAPL) shares declined after the Nikkei newswire reported that the company scaled back production plans for the iPhone because sales have trailed expectations.
The stock fell as much as 4.5 percent to $497 in early U.S. trading. It dropped to $520.30 at the close in New York on Jan. 11 and has lost 26 percent from a September record.
Apple, based in Cupertino, California, reduced its original targetto order 65 million iPhone 5 displays this quarter by about half, Nikkei said, citing an unidentified senior executive at a component maker it didn’t name. IPhone sales are slowing because smartphones have saturated developed markets, where Apple is strongest, said James Cordwell, an analyst at Atlantic Equities Service in London.
“We’re getting close to saturation,” said Cordwell, who ratesApple shares “overweight” and doesn’t own any. “The real growth is going to come from emerging markets, and Apple’s share in emerging markets is much lower than it is in other markets at the moment due to such high prices.”
Bethan Lloyd, a spokeswoman for Apple in the U.K., didn’t immediately return calls seeking comment.
