Why Apple Was Down $16 This Morning
Apple got hammered this morning, down by more than $16 at the low before recovering, following two negative storylines related to Jabil Circuit and China Mobile . First, supplier Jabil Circuit reported earnings along with disappointing outlook while citing a "shift in demand" at one of its major customers. That customer is presumably Apple as Jabil Circuit assembles the iPhone 5c, sparking fears about iPhone demand. However, a shift in demand could just mean that the iPhone 5s is more popular, which is actually good news for Apple's product mix.
Today was also the day that investors expected Apple and China Mobile to make their partnership official, since the carrier has now launched its 4G TD-LTE network in several markets in China. China Mobile expects to sell 220 million smartphones next year, of which 100 million will be 4G devices. The carrier said it's still negotiating with Apple. Meanwhile, subsidy expenses are expected to rise further from the $4.5 billion that China Mobile spent in 2013. Despite no announcement, this deal is still very likely imminent and it's just a matter of timing at this point.
In this segment of Tech Teardown, Erin Kennedy discusses the ever-elusive China Mobile deal with Evan Niu, CFA, our tech and telecom bureau chief.
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The article Why Apple Was Down $16 This Morning originally appeared on Fool.com.Erin Kennedy and Evan Niu, CFA own shares of Apple. The Motley Fool recommends and owns shares of Apple. It owns shares of China Mobile. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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