By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Losses from Apple Inc. stood out
in the tech sector Wednesday, with the company's shares falling
more than 5% as investors reacted to the price of the new iPhone 5C
in emerging markets such as China.
Apple (AAPL) shares fell by $27.46 to $467.19 after analysts at
Bank of America/Merrill Lynch, Credit Suisse and UBS all cut their
ratings on the company's stock. The main reason cited was that the
iPhone 5C, which will start at $99 in the U.S. with a two-year
service contract, will cost the equivalent of $733 in China for an
"unsubscribed" phone, meaning the phone doesn't come with a
contract from a wireless carrier.
Few mobile-phone consumers in emerging markets such as China use
their phones with service contracts, and the unsubscribed price of
the iPhone 5C was slammed by several analysts.
UBS analyst Steven Milunovich, who cut his rating on Apple to
neutral from buy, and lowered his price target to $520 a share from
$560, said he fears "Apple's pricing strategy will hamper the
company's ability to be competitive in key growth areas in the
smartphone market, particularly in China."
Companies that have provided chips for the iPhone and other
smartphones also retreated, with Qualcomm Inc. (QCOM) down 3.5%, to
$67.66, and Broadcom Corp. (BRCM) off by 2% at $26.25.
Take-Two Interactive Software Inc. (TTWO) shares were off by 5%
at $17.24. Pacific Crest analyst Evan Wilson cut his rating on
Take-Two's stock to sector perform from outperform in advance of
next week's release of "Grand Theft Auto V".
Losses also came from Netflix Inc. (NFLX), down by almost 2% at
$307.40; Amazon.com Inc. (AMZN), which pared back by 73 cents a
share to trade at $299.68 and Hewlett-Packard Co. (HPQ), down 7
cents a share at $22.21.
Texas Instruments Inc. (TXN) was at its break-even point of
$40.31.
Late Tuesday, TI narrowed its third-quarter outlook to a range
of $3.15 billion to $3.29 billion from an earlier estimate of sales
between $3.09 billion and $3.35 billion.
The Nasdaq Composite Index (RIXF) trimmed its losses, but was
still down by 8 points at 3,720, while the Philadelphia
Semiconductor Index (SOX) was also in the red.
Despite the broad losses, some gainers managed to emerge.
Pandora Media Inc. (P) rose almost 5% to $21.32, eBay Inc. (EBAY)
was up by 1.7% at $54.38 and Polycom Inc. (PLCM) shares climbed by
8.5% to $10.81.
Polycom got a lift after the videoconferencing technology
company said its board approved a $400 million stock buyback plan
that will be funded by $150 million in cash and $250 million in
debt.
Fusion-io Inc. (FIO) shares rose 15.5%, to $15.13, on
speculation that Seagate Technology (STX) might be interested in
acquiring the flash-memory technology company.
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