Apple shares tumbled more than 6 per cent yesterday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market.
Investors and analysts blamed the sell-off on a mix of factors, including a forecast by an influential research firm that the iPad maker is continuing to cede ground to Google's Android gadgets, and unconfirmed reports that at least one major stock-clearing house was raising margin requirements on Apple stock trades.
Wednesday's drop rounded off a bleak 10 weeks for the most valuable US company.
The stock was one of the day's biggest percentage losers on the S&P 500, shedding $35 billion of market value as more than 37 million shares changed hands - blowing past the company's average daily volume over 50 days of 21 million.
Apple's shares, once among the most desirable of portfolio holdings, have headed steadily lower since September on growing uncertainty about the company's ability to fend off unprecedented competition.
This year saw a surge in sales of Amazon.com's cheaper Kindle Fire and Microsoft's first foray into the tablet market with its Surface.
Meanwhile, Samsung Electronics continues to chip away at the iPad's dominance with its Galaxy line.
The assault on Apple's consumer-electronics home turf presents a stiff challenge for CEO Tim Cook, who was elevated shortly before the death of Silicon Valley legend Steve Jobs and is now charged with keeping the world's largest technology company humming.
"This is not going to be a short-term trend. This is a management test, of how well they can perform without Steve Jobs," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
Referring to Apple's new iPad mini, which is a smaller version of the existing iPad, Battle said the company needs "another home run" for shares to return to levels around $700.
"They need another new product that hits it out of the park. Without that, they could get a gradual grind-down in confidence," he said.
Research firm International Data said Apple most likely shed market share in the tablet computer space in 2012. Its worldwide tablet market share will slip to 53.8 per cent in 2012 from 56.3 per cent in 2011, while Android products would increase their share to 42.7 per cent from 39.8 percent, IDC said.
The stock's massive market value meant Apple was almost single-handedly responsible for Wednesday's 1.1 per cent decline in the Nasdaq 100 Index.
Apple is still up 33 per cent this year, but is down nearly 24 per cent from its record high of $705.07, hit on September 21. The stock slid more than 6.4 percent on Wednesday to close at $538.7923.
Some analysts were perplexed at the fall from favor in Apple stock, which has been a staple in almost all growth portfolios. The company is expected to deliver reliably high revenue and earnings expansion for years to come, and one in two tablets sold globally remains an iPad.
It is now gearing up for the introduction of its latest iPhone 5 and iPad mini in international markets. It will begin selling the iPhone 5 in 50 countries in December, including China and South Korea.
"Apple stock is significantly more volatile than its earnings and innovation stream," said Daniel Ernst, analyst with Hudson Square Research. "And yet the wind blows slightly from the south instead of the east one particular morning, and the stock is down 6 per cent."
"It makes no sense. There are lines around the block for their products all around the world," he added. "No other company has that."
