Apple saw its shares plunge more than 18 percent by the end of trading Monday, as two analysts downgraded the computer and consumer electronics maker in the face of worsening economic conditions and weak projected demand. However, some did say the iPhone 3G may be the company's saving grace.
It was the single biggest drop in Apple's shares in more than 16 months, and came on a day when the U.S. stock market got hammered because of the collapse of the financial bailout bill. Kathryn Huberty of Morgan Stanley changed her rating from overweight to equal-weight and RBC Capital Markets analyst Mike Abramsky cut his rating to sector perform from outperform.
However, the glimmer of good news in the company's misfortunes is that the iPhone 3G continues to be the hottest smartphone on the market, and may be the catalyst that drives growth at the end of the year for Apple.
"Market sales will slow, but I don't think that level of deterioration is likely for Apple," said Andy Hargreaves of Pacific Crest Securities. "Because of growth in the iPhone and stability with lower price points for iPods, Apple will continue to drive strong cash flow."
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