Apple shares slid more than 4 percent yesterday to a five-month low as investors grew more uncertain about its ability to fend off unprecedented competition and untangle a snarled iPhone 5 supply chain.
Apple, long a mainstay of many fund portfolios, has lost 20 percent -- $US130 billion of its market value -- since hitting a record high in September.
Fund managers cited fundamental concerns about its supply chain and intensifying competition from resurgent rivals such as Samsung and Amazon.com, as well as profit-taking after the elections.
Global shares fell with investors worried that the deep fiscal challenge facing President Barack Obama after his re-election could lead to a new recession.
Apple has maintained a torrid pace of growth in recent years thanks to a run of successful iPhones and iPads. But many investors question whether it can keep innovating and keep ahead of ever-more aggressive competition under new management, installed after the death of its chief inspiration Steve Jobs.
"For now, everything has been refreshed and all the new products are out," Tim Ghriskey, CIO of Solaris Asset Management said ."Then there are questions about whether margins have peaked at this company."
Last month, Apple said it expects its industry-leading margins to shrink this quarter as new products -- particularly the iPhone 5 that accounts for about half its revenue -- have become more expensive to build.
Chairman Terry Gou of Foxconn, Apple's main contract manufacturer, said on Wednesday the company was "falling short of meeting the huge demand" for the phone.
Apple shares hit a low of $US556.04 on Wednesday, before trading down 3.5 percent at $US559.90 in the afternoon. The share price drop follows the revelation Apple culled hundreds of resellers from its Australian channel.
Analysts said the company remains a solid long-term bet. But near-term uncertainty persists after CEO Tim Cook ousted veteran mobile software chief Scott Forstall -- a protege of Jobs' and one of the company's most valuable assets, and as results in the latest quarter were short of expectations.
Apple faces fiercer competition during the crucial holiday season as rivals such as Samsung, Google and Amazon challenge its supremacy in smartphones and tablets. Microsoft's Surface also marks the first time the software giant is gunning for Apple on hardware, its forte.
Apple's tablet market share slid to 50 percent during the third quarter, while arch-foe Samsung more than doubled its share to 18.4 percent, according to research firm IDC.
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