NEW YORK ( TheStreet) -- This week Apple (AAPL - Get Report) shares fell below $400 for the first time since December 2011, but closed above that level on the back of weaker-than-expected-results from one of its suppliers, Cirrus Logic (CRUS - Get Report). Apple shares reached levels not seen since January 2012.
Cirrus Logic, which provides chips for Apple's products, also announced that it "will take net inventory reserve of $23.3 million of which approximately $20.7 million is due to a decreased forecast for a high volume product."
For the company's first quarter which ends in June, Cirrus Logic said it expects revenue to be between $150 million and $170 million. Analysts polled by Thomson Reuters are expecting $182.38 million in revenue.
"We feel investors have been waiting for expectations to be reset lower following broadly held concerns over iPhone 5 and iPad 4 demand," Canaccord Genuity analyst Bobby Burleson wrote in a note. The analyst lowered his Cirrus price target to $25 from $30.Apple Closes Above $400, Falls Sharply on Growth Concerns
Verizon (VZ - Get Report) said Thursday that it activated 4 million iPhones from Apple (AAPL - Get Report) in its first quarter. The good news is that's a 25% increase compared to the same period a year ago. The bad news is that people are still flocking to older phones. Verizon iPhone Sales Rise 25% Though Apple Concerns Remain "It would not surprise me to see another revenue miss from Apple, given the lower average selling price (ASP) associated with the older iPhones," said TheStreet's Chris Ciaccia. "Should the ASP come down on iPhones, that could be another reason for the telecoms to think about playing hardball on subsidies," Ciaccia added. Ciaccia noted that Verizon, AT&T (T - Get Report), et al. pay a large subsidy to Apple on the iPhone, as much as $400, initially easing the cost for consumers. "That could force a reworking of the deal, though I suspect that's probably something for 2014 or 2015, if at all. I'd put the likelihood of a subsidy cut anytime in the next 12 months at 10% or less." He notes that it'll be interesting to see what AT&T has to say when it reports earnings next week. The telecom giant reports on the same day as Apple.