Apple shares slide on iPhone problems

Apple shares were down sharply on Tuesday after Consumer Reports panned the new iPhone because of reception problems and rumors swirled about a possible recall.

Shares in the California gadget maker were trading 3.13 percent lower at 249.22 dollars at noon (1600 GMT) on Wall Street.

Apple's slide came a day after Consumer Reports, the influential magazine for product reviews, gave the iPhone 4 the thumb's down because of signal loss problems it said were caused by a design flaw.

Citi analyst Richard Gardner said conjecture about a recall was one of the factors sending Apple shares lower but dismissed it as unlikely.

"We consider the probability of a recall to be very low given our view that the issue in question is not serious enough to warrant a recall," Gardner said.

Jeffries analyst Art Hogan said meanwhile that the release of the iPhone 4 is "the first time we've seen Apple stumble" but it was probably just a "bump in the road" for the maker of the Macintosh computer, iPod, iPhone and iPad.

(c) 2010 AFP