Some of the pessimistic momentum from yesterday's monstrous 6% sell-off carried over for Apple (NASDAQ:AAPL) this morning. Shares opened $10 lower than they closed yesterday, and then proceeded to give up another $10, down nearly 4% at the low. The stock subsequently recovered, but what was behind the morning stumble?
Looking through early headlines points to one possibility. Reuters reported that Apple's smartphone market share in China dropped in the third quarter and is now the No. 6 seller in its most important growth region, according to the most recent figures from IDC. China's not only incredibly important to Apple, but also to the broader smartphone market as the largest geographical market.
Apple fell two places sequentially, as its market share was less than 10% in the third quarter. Competition from local players like Lenovo, ZTE, and Huawei is intensifying, and Samsung continues to execute well.
Qualcomm (NASDAQ:QCOM) exec Jeff Lorbeck was quoted saying that price remains a key factor. Local players have been tackling lower price points that Apple isn't willing to and clearly have something to show for it.
Nokia (NYSE:NOK) has just announced its newest Lumia device on China Mobile's (NYSE:CHL) network, the largest carrier in the country. The Lumia 920T will compete on the high end by pricing close to the iPhone. That front runs the long-rumored deal between Apple and China Mobile, giving Nokia a leg up in the Chinese market.
While the news certainly isn't good for Apple, it's entirely expected considering the upcoming launch of the iPhone 5. IDC believes Apple's position will rebound after the device launches later this month, and China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA) have already started taking preorders. Purchasing delays ahead of new product launches are entirely expected.
Just wait until investors see how many iPhones Apple sells in the fourth quarter. We already know the company's expecting a blowout.
Fool contributor Evan Niu, CFA, owns shares of Qualcomm and Apple. The Motley Fool owns shares of Apple, China Mobile, and Qualcomm. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.