Apple Shares Hit 10-Month Low

The iPhone and iPad are among the most wanted gifts this holiday season, but Apple continues to be out of favor with investors.

Apple (AAPL) shares fell nearly 4% to 509.79, hitting their lowest level since February.

The latest news making investors nervous includes an analyst report with a lower earnings forecast for the next two years and worries about weaker-than-expected iPhone 5 sales in China.

UBS Securities analyst Steven Milunovich on Friday cut his earnings per share estimates for Apple's fiscal 2013 and 2014 by about 10% to roughly 5% below consensus forecasts. He now expects EPS of $47, down from $51.50 for the year ended in September, and $55.85, down from $62, for 2014. He expects lower iPhone and iPad sales than he originally forecast.

Milunovich cited supply chain checks indicating a slowdown in iPhone production in the March quarter and expectations that the iPhone 5 won't sell as well in China as the iPhone 4S. He also says the new iPad Mini is cannibalizing more sales of full-size iPads than expected. Plus, he says his prior forecast underestimated European economic woes as well as smartphone competition.

Milunovich kept a buy rating on Apple shares, but lowered his price target to 700 from 780.

Jefferies analyst Peter Misek cut his current-quarter iPhone sales estimate on Friday to 48 million from 52 million, citing concerns about sales in China. The iPhone 5 debuted in China Friday to smaller crowds than other Apple launches, he said.

But Piper Jaffray analyst Gene Munster dismissed those worries in a report: "We believe there are three core reasons for fewer lines as compared to the 4S: Apple implementing a reservation system to avoid crowds, double the number of points of sale compared to the 4S, and increased pre-orders online. We remain comfortable with our 45 million December iPhone unit estimate, including 4 million-5 million from China.

Concerns about shipments and orders hit Apple suppliers. Broadcom (BRCM) lost 4%, Cirrus Logic (CRUS) 7% and Qualcomm (QCOM) 5%.

Meanwhile, a Delaware federal jury found Thursday that the iPhone infringed on three MobileMedia patents that cover features like camera phone technology. They were acquired in 2010 by Nokia (NOK) and Sony (SNE), which hold stakes in MobileMedia, Reuters reported. The court will determine a damage award later.