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Apple's share tank on disappointing iPhone sales

Apple's share tank on disappointing iPhone sales
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Disappointing iPhone sales in the run-up to the Christmas holidays caused Apple’s shares to tumble 12 percent on Thursday.

The sell-off was sparked by fears that Apple is losing its dominance in smartphones, with customers changing their preference to models with larger screens.

“We think Apple is losing the screen-size wars,” Jefferies analyst Peter Misek said. He noted that demand was moving away from the iPhone’s 3.5-inch and 4-inch screens to screens of 5 inches offered by rivals such as Samsung, HTC and Nokia.

Apple said it shipped a record 47.8 million iPhones in the December quarter. That was well below the average of analysts’ forecasts, which was for 50 million.

The shares suffered their biggest percentage drop in over four years, slicing more than $50 billion from the company’s market value.

The company’s profit margins were also hit, partly because the iPad is cannibalising its high-margin Macintosh computers.

Analysts said Apple’s growth would hinge on new products, but added that a new launch wasn’t on the horizon.

“To re-accelerate growth, Apple likely needs to launch new products, yet few seem likely before June,” Nomura’s Stuart Jeffrey said.

The company has been long rumoured to be working on a television but has so far deflected questions on its existence. Apple hasn’t launched a new line of products in almost three years, apart from a smaller version of the iPad.