Apple’s shares fell as much as 8.8 percent on Tuesday, their steepest decline in a year, a day after the company’s weak revenue forecast for the current quarter renewed fears about Chinese smartphone demand and a tepid global market.
The world’s most valuable technology company had lost $43 billion of its market capitalization – more than the entire market value of Twitter Inc – at the stock’s intra-day low of $502.07.
Activist investor Carl Icahn, who is waging a public campaign to get Apple to return more cash to shareholders, bought up $500 million worth of Apple stock – his third purchase of the same size in less than a week – to boost his total investment in the iPhone maker to more than $4 billion.
At least 14 brokerages lowered their price targets on Apple, reflecting concerns that it was becoming harder to sell high-end phones as markets get saturated.
The record 51 million iPhones sold by Apple in the quarter ended December 28 fell short of the 55 million expected by Wall Street.
Analysts on Tuesday attributed some of this shortfall to the pricing of the iPhone 5C. Apple’s low-cost alternative to its iPhone 5S was unable to grab market share from cheaper rivals using Google Inc’s Android software, they said.
“We don’t think Apple has created a meaningful new product category with the iPhone 5C,” BMO Capital Markets analyst Keith Bachman wrote in a report.
He said Apple should create a “more impactful medium-price iPhone”, with a lower price tag than the iPhone 5C launched in September.
The iPhone 5C sells for $549 without a two-year contract with a telecom carrier. Samsung Electronics Co Ltd’s flagship Galaxy S4 now sells for $530 without a contract in the United States, while Google Nexus 5 sells for $350.
Analysts said they were looking to the launch of the iPhone 6, a mid-range smartphone, and wearable devices such as iWatch in the second half of the year to boost investor confidence.
“Apple has the ability to lower the price of the iPhone to compete more aggressively in the midrange, and we believe the resulting elasticity would yield net profit improvements,” Goldman Sachs analysts said.
Apple maintained its gross profit margin of 37.9 percent for the quarter just ended, as more people opted for the high-margin iPhone 5S than the 5C.
But rival Samsung, which has a phone for every budget, widened its lead over Apple by cornering 29.6 percent of the global smartphone market in the fourth quarter of 2013, ahead of Apple’s 17.6 percent, data from research firm Strategy Analytics showed.
“The high-end smartphone market is simply looking saturated,” Evercore analyst Rob Cihra wrote in a note. “Although adding a cut-rate low-end doesn’t suit Apple’s (business) model, not having one limits growth.”
IPHONE SALES DISAPPOINT
Citigroup analyst Glen Yeung said the iPhone sales miss comes despite expectations of higher sales from China, where it signed a deal with China Mobile Ltd, and the addition of NTT DoCoMo as a carrier in Japan.
Analysts said slowing growth in iPhone sales was not just due to company-specific reasons, noting that Samsung’s Galaxy phones have also been facing a decline in demand.
“There were a lot of reasons to believe iPhone sales would grow double-digit in units in 2014 even as the market matured, but 1Q results and the March guide pretty much put that thesis to rest,” Raymond James analyst Tavis McCourt wrote in a note.
McCourt downgraded the stock to “outperform” from “strong buy” and cut his price target to $550 from $700.
Apple forecast sales of $42-$44 billion this quarter – brisker than usual because of its deal to sell iPhones through China Mobile, the country’s No.1 carrier. Wall Street analysts on average had expected $46 billion.
“We had assumed the China Mobile partnership would mute March quarter seasonality, but this was overly optimistic,” Goldman Sachs analysts said in the note.
Several analysts, however, said the China Mobile deal would begin to pay off as the company extends the partnership to 340 Chinese cities by the end of the year, from only 16 currently.
The Ultimate American Road Trip: Route 66
If you’re looking for the omega American road trip then you’ve got to hit the Mother Road, otherwise known as Route 66. From Chicago to LA, it’s a journey that’ll provide the experience of a lifetime, showing you the heart of a great nation.
Start in Chicago & Chase the Sun
In reality, the best always head west. Would you rather end the trip in the Windy City, or just in time to catch a gorgeous L.A. sunset on the beach? There’s just something deeply spiritual for folks when we head west. It becomes an adventure. It becomes a vehicular voyage to the sea. Here are some of the highlights you can expect in order:
• Illinois: It’s a pretty straight shot through the state from Chicago through Springfield (which has some stretches of restored Route 66) and southwest to St. Louis. There’s a bit of the bright lights of big cities, but also a good calm stretch of rural to cruise through as well; vast fields of corn and farmland for close to 300 miles.
• Missouri: Once you hit East St. Louis you’ll again be greeted by sky scrapers, industrial areas and the mark of modernity but then it’s another SE straight shot through the entire belly of the state.
• Kansas: You’re only going to spend a little time in the good’ol Kansas heartland. And by little we mean a whopping 14 miles far down in the bottom south east corner. You’ll go through two towns: Galena and Baxter Springs but rest assured there’s great classic restaurants and places that’ve been open as long as Route 66 has been around. In fact, it’s because of road tripper like you just passin’on through that keep’em goin.
• Oklahoma: You’re going to go through two huge metropolises that have “country” written all over’em: Tulsa first and then into Oklahoma City before heading directly west towards the Pan Handle. Of all 8 states, it’s here that they take Route 66 the most seriously. It’s got the most preserved still-drivable miles and you’ll be able to see the remnants of Kiowa, Apache and Comanche Native American land. And, you’ll get to take the same route as families long ago in the Dust Bowl took to escape.
• Texas: You’re going to go through the upper tip of the Texas Pan Handle that takes you through Amarillo. It looks short on a map but the 200-mile stretch of plains is a sight to behold like none other. If you can time it so you cut through here in the afternoon on a sunny day your spirit will be recharged. Just try not to pay any attention to all the truckers!
• New Mexico: Welcome to the Land of Enchantment where you’ll pass through Sun Belt city and Albuquerque. These days, it can be a bit challenging to stay strictly on the old road but with all the sandstone mesas and pine forests it’s definitely worth it.
• Arizona: In Arizona you’ll stay in the northern plains rather than heading down into the really hot areas around Phoenix. Instead, you’ll pass directly through Flagstaff which is a mountain town and where Northern Arizona University is located. The sights here are like a completely different world from everything you’ve seen so far, especially once you begin to head south right before passing into California. Oh, and because of the high speeds on the I-40, this will feel like one of those awesome car track days.
• California: Once you reach this point get ready to cruise through rolling hills, vineyards, orchards, stunning landscapes and then at Barstow you should begin smelling the sea. From San Bernardino and Pasadena to Santa Monica it’s simply breathtaking.
This is only a taste of the experience really. You’ve just got to get out and do it. There’s plenty of great resources online to keep you on track and if you have the time you don’t have to miss a thing. Enjoy!
Key Moments from Trump’s Impeachment Hearing
Heartbreaking; Another School Shooting Santa Clarita, CA
Santa Clarita, California, high school shooting leaves 2 students dead, multiple injured
SANTA CLARITA, Calif. (KABC) — A 16-year-old boy shot five fellow students, two fatally, Thursday morning at Saugus High School in Santa Clarita before turning the .45-caliber handgun on himself, authorities said.
A Los Angeles County Fire Department spokesperson said multiple 911 calls prompted firefighter-paramedics to respond about 7:40 a.m. to the school at 21900 Centurion Way.
Six students, including the gunman, were found in the quad suffering from gunshot wounds, Sheriff Alex Villanueva said at a news conference. All six were transported to hospitals, where two of them, a 16-year-old girl and a 14-year-old boy, were later pronounced dead.
The surviving victims were described as two girls, ages 14 and 15, and a 14-year-old boy.
In a tweet, Henry Mayo Hospital said it had received four patients.
Their names were not immediately disclosed. The sheriff said the deceased girl’s parents were at the hospital. He was notified of the second fatality during a press conference at the school.
Gunman turns .45 caliber on himself
According to sheriff’s Capt. Kent Wegener, surveillance video “clearly” shows the suspect pulling a semi-automatic handgun out of his backpack in the quad and shooting five classmates before shooting himself in the head.
Thursday was the gunman’s 16th birthday, the captain said.
He was listed in grave condition at a hospital, according to Villanueva.
In the immediate aftermath of the shooting, authorities released a description of the suspect as a manhunt got underway. Heavily armed deputies and an armored SWAT vehicle were seen at a home near the school, but it was unclear if the house was connected to the investigation.
The high school remained on lockdown for hours after the incident. Shortly before 11 a.m., lockdowns were lifted at all campuses in the district, as well as Rosedell and Highland elementary schools.
Central Park, at 27150 Bouquet Canyon Road, was being used as a reunification point for parents and students, the Sheriff’s Department said.
Undersheriff Tim Murakami tweeted an apology to parents, saying investigators need to interview “every student at Saugus HS” before they can be released.
In a statement, the White House said President Donald Trump was monitoring ongoing reports about the shooting.
“The White House encourages all those in the area to follow the advice of local law enforcement and first responders,” the statement said.
Gov. Gavin Newsom tweeted an expression of gratitude to the emergency responders.
“We simply should not have to fear for our kids’ lives when we drop them off at school,” the governor said. Addressing Senate Majority Leader Mitch McConnell, Newsom asked: “How many more lives will be lost? How many more shootings will we have to endure? We need commonsense gun reform. NOW.”
Amid the chaos at the scene, the number of reported victims fluctuated throughout the morning. The sheriff later confirmed that six people were shot, including the gunman.