Apple shares drop

Photo: The Canadian Press. All rights reserved.

In this Thursday, Jan. 10, 2013, photo, Trader Richard Newman checks prices as he works on the floor of the New York Stock Exchange. Stocks edged lower on Wall Street, with the Standard & Poor's 500 slipping from close to a five-year high. Apple stocks tumbled on concern that demand for the iPhone 5 is waning. (AP Photo/Richard Drew)

Apple's stock slipped below $500 for the first time in 11 months on Monday as investors reacted to reports signalling the company's latest iPhone is falling further behind a slew of sleek alternatives running Google's Android software.

The latest indication that Apple, the world's most valuable company, is seeing sluggish demand for its iPhone 5 emerged in separate stories published Monday in the Japanese newspaper Nikkei and The Wall Street Journal. Both publications cited unnamed people familiar with the situation saying Apple has dramatically reduced its orders for the parts needed to build the newest iPhone because the device isn't selling as well as the company hoped.

The adjustment means Apple will buy about half as many display screens for the iPhone as management originally planned for the opening three months of the year, according to the newspapers.

Apple Inc., which is based in Cupertino, Calif., declined to comment Monday. Spokeswoman Natalie Kerris said Apple executives would share their views on market conditions Jan. 23 when the company is scheduled to release its financial results for the final three months of 2011. The period covers the first full quarter that the iPhone 5 was on sale.

Although Apple hailed the iPhone 5 as the best version yet of a product that has revolutionized the telecommunications and computing industry, the company's stock has wilted since the device hit the market.

After peaking at $705.07 on the day of the iPhone 5's Sept. 21 release, Apple's stock has plunged nearly 30 per cent. The shares fell $18.55, or 3.6 per cent, to close Monday's regular trading at $501.75, dragging the company's market value nearly $190 billion below where it stood in late September. The stock traded at $498.51 earlier in the day, its lowest price since February.