Apple Inc. shares dropped below $500, the first time since February, after the company was downgraded by Citigroup Inc. on concern that demand for the iPhone 5 model is slowing.
In premarket trading, Apple stood at $498.69 as of 5:19 a.m. New York time. The stock of the Cupertino, California-based company had dropped 3.8 percent to $509.79 in Nasdaq Stock Market trading on Dec. 14.
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Citigroup downgraded Apple to neutral from buy and reduced its price target to $575 from $675. The iPhone, which debuted in 2007, is Apple's biggest product by sales. It accounted for 51.42 percent of revenue in the year ended September, according to data compiled by Bloomberg.
Near-term supply-chain order cuts, while inconclusive, raise questions about iPhone 5's strength, Citigroup said in the note after checks of the hardware supply-chain in Asia.
The prospect of weak iPhone 5 shipments creates near-term earnings downside for Apple's supply chain, and the involved companies are likely to see further selling pressure in the near term, Citigroup said.