Apple's stock dropped nearly 4% in early trading Friday, falling to as low as $509 a share on concerns about demand for the iPhone 5 in China.
The latest iPhone went on sale in China Friday, but according to a report in The Wall Street Journal, the initial reception for the device was much more tepid than in previous years.
"Apple’s flagship store in Beijing’s upscale Sanlitun shopping district began selling the iPhone 5 for the first time on Friday in what was arguably the least eventful launch of an Apple device in the company’s four-year history in the Chinese capital," the Journal reported.
There are several possible reasons for this, including more Apple stores in China and a new company policy requiring customers in China to apply online a day in advance to secure a window of time to pick up an iPhone.
That said, China is considered a key growth market for Apple and the report appears to have ignited concerns among investors that demand for the iPhone in that country is lower than expected.
To make matters worse, multiple analysts have cut their price target on Apple's stock this week. Steve Milunovich, an analyst with UBS Investment Research, cut his price target on the stock to $700 from $780 on Friday. Milunovich specifically cited concerns about sales of the iPhone 5 falling short of those of the iPhone 4S.
Apple is now on its way to erasing most of its gains from the calendar year. The stock closed at $405 a share at the end of 2011. This year, the stock peaked at $705 a share in September after the iPhone 5 launch, but it has since given up the majority of those gains.