Investors are harvesting their Apple profits. Since hitting an all-time high of $705 on Sept. 21, Apple stock has plunged 25 percent.
There are three leading theories for the cause of the sell-off:
The Competition Conundrum
Apple's grip on the growing mobile computing market is loosening.
The iPhone's early lead has been surrendered to the more than 500 million devices running on Google's free Android software. Apple has shipped 271 million iPhones since 2007.
Now, competition is growing in the tablet market. The iPad's current 56 percent market share will dip below 50 percent by 2016, predicts IDC, a market research firm.
The Creativity Contraction
Since the death of co-founder Steve Jobs, Apple has mostly been fine-tuning products. Can Apple conjure up another revolutionary device to catapult it into another stretch of breakneck sales growth? Most analysts believe an Apple TV, which is in development, could be its next breakout product, but the timing is uncertain.
The Fiscal Cliff Countdown
Longtime Apple shareholders may be selling to lock in gains at a lower tax rate. Under laws set to expire Dec. 31, profits on stocks owned for at least a year are taxed at a 15 percent rate. The rate on capital gains is set to rise to 20 percent, 23.8 percent for people with high incomes. The recent drop notwithstanding, Apple's stock has had an incredible run. Even investors who got in at the beginning of this year are sitting on a total return of 32 percent.Associated Press