After falling into a downward trend since peaking at $705 last year, shares of Apple (NASDAQ:AAPL) plummeted on Wednesday and stumbled below a key psychological level: the $400-per-share mark. The wave of negative sentiment peaked after Cirrus Logic (NASDAQ:CRUS), which is widely believed to make analog and audio chips for the iPhone and iPad, announced a weaker-than-expected forecast. Now, it looks like Apple is also having problems with its Mac line of desktops and notebooks.
Rumors flooded in Thursday morning from related upstream suppliers who told Digitimes that Apple has stopped placing component orders for its Mac line. According to AppleInsider, suppliers had expected Apple to move through its inventories by April, but they have not received additional orders for Mac components or additional instructions from the computer maker yet. Since the Lunar New Year holidays — which were celebrated in early February — Apples supply chain orders have reportedly dropped to nothing.
For Apple, the pause in orders could indicate that the company overestimated demand for its notebook and desktop models as the market for personal computers has contracted further with each passing quarter. Apple had high hopes for its Mac product lines and placed aggressive orders at the end of 2012; however, the company is now badly affected by the decision, noted Digitimes in its coverage…
Research firm IDC reported several days ago that worldwide PC sales plummeted 14 percent from the year-ago period last quarter — which was the worst yearly decline since IDC began tracking PC sales in 1994. Already, Apple has had difficulties selling its MacBook Pro at its starting price, and even a $200 discount has not helped the devices move off shelves. While sales of the companys Mac desktop computer — bucking the current trend — increased in January by 31 percent year-over-year, overall sales for the December quarter dropped.
Apple typically provides suppliers with a shipment forecast for the upcoming 12 weeks, but according to the report in Digitimes, no estimates have been received for the second quarter and some suppliers are worried that shipments might not resume until May.
In general, supply chain issues have been dogging Apple recently because the precise timing required to manufacture several of its devices has led to shortages that hurt overall sales. This problem affected Mac sales just after the company updated the desktop computer back in November. Analysts — like KGI Securities’ Ming-Chi Kuo — had hoped that the redesigned iMac could be its desktop divisions savior, but instead, the new manufacturing technique created huge delays.
Even if the PC industry continues to shrink — and every sign indicates that it will — Apple is well situated to take advantage of customers desire for mobile devices. After all, the company pioneered these device segments, and as a result, it has traditionally benefited from this trend. Apples chief executive officer, Tim Cook, even called the iPad the “poster child of the post-PC revolution.”
However, with this rumored order shift, Apple suppliers could be left in a lurch, and the companys bottom line will undoubtedly be affected as well.
Here’s how shares of Apple have traded this week, finishing Thursday under $400:
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