Apple stock sank Thursday on news reports that the consumer electronics giant cut iPhone prices in China to compete with domestic rivals such as Huawei.
Apple announced discounts of up to 500 yuan (about $68.50) on its current iPhone models in China. It also is offering discounts on other items such as MacBook computers.
The discounts come as Apple is facing intensifying pressure from homegrown competitors in China.
Huawei's Mate 70 smartphone has grabbed market share thanks to its artificial intelligence features. Meanwhile, Apple's iPhones don't offer AI features yet in China. Apple is hoping to partner with local internet services firms such as Tencent and ByteDance to offer AI features in China.
China is Apple's second-largest market, so weakening sales there would be a financial headwind.
On the stock market today, Apple stock dropped 2.6% to close at 243.85.
Apple Stock Gets Neutral Rating
Since hitting an all-time high of 260.10 on Dec. 26, Apple stock has fallen for the last four trading sessions.
On Wednesday, UBS analyst David Vogt reiterated his neutral rating on Apple stock with a 12-month price target of 236.
Vogt lowered his iPhone sales estimates on soft sell-through trends in the calendar fourth quarter. He noted that Apple's handset sales were particularly weak in China.
Vogt now estimates iPhone sell-in sales of about 74 million units in the December quarter. That would be a decline of 5% year over year and below the consensus estimate on Wall Street of 77.5 million units.
"At an average ASP (average selling price) of about $908, we now expect iPhone revenue to decline 5% year over year in the December quarter," he said in a client note.
Apple stock is on the IBD Tech Leaders list.
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