Why Apple Was Down $16 This Morning

Apple  (NASDAQ: AAPL  ) got hammered this morning, down by more than $16 at the low before recovering, following two negative storylines related to Jabil Circuit  (NYSE: JBL  ) and China Mobile  (NYSE: CHL  ) . First, supplier Jabil Circuit reported earnings along with disappointing outlook while citing a "shift in demand" at one of its major customers. That customer is presumably Apple as Jabil Circuit assembles the iPhone 5c, sparking fears about iPhone demand. However, a shift in demand could just mean that the iPhone 5s is more popular, which is actually good news for Apple's product mix.

Today was also the day that investors expected Apple and China Mobile to make their partnership official, since the carrier has now launched its 4G TD-LTE network in several markets in China. China Mobile expects to sell 220 million smartphones next year, of which 100 million will be 4G devices. The carrier said it's still negotiating with Apple. Meanwhile, subsidy expenses are expected to rise further from the $4.5 billion that China Mobile spent in 2013. Despite no announcement, this deal is still very likely imminent and it's just a matter of timing at this point.

In this segment of Tech Teardown, Erin Kennedy discusses the ever-elusive China Mobile deal with Evan Niu, CFA, our tech and telecom bureau chief.

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  • Report this Comment On December 18, 2013, at 10:06 PM, PedroHMG wrote:

    Apple was down today because of people with no horizon for investing & no understanding of Apple's current sales momentum. Apple is number one in smart phone sales on all four main United States carriers over the last three months. Apple smart phones dominate on all of the Japanese carriers. Apple will report over $60 billion in sales in January 2013. Yes..they (today's sellers) were just short sided as Apple will hit $650 plus after a major blowout and that is without China Mobile.

  • Report this Comment On December 19, 2013, at 11:01 AM, Saxman2 wrote:

    I agree with Pedro.......

    When apple hits $650 these guys wont rest until they try to tamp down the share price with phoney articles.they don't use any rational means to evaluate apple.its disinformation at its finest.

    If I were apple ,I would hire these writers to discredit my competitors.Some are very good at making the unbelievable ... Believable to the untrained reader.

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