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DAVID GRAY/Reuters

Shares in Apple Inc. sank nearly 4 per cent Friday to a 10-month low amid signs its iPhone 5 hasn't exactly ignited a frenzy of buying interest in China. UBS also slashed its price target on the stock, which has been struggling to gain any latitude after forming a bearish "death cross" formation on the charts one week ago.

Apple shareholders were hoping the launch of the latest iPhone in Apple's second-largest and fastest-growing market would stir up some fresh buying interest in the stock. But today in Shanghai, just one person in the financial district was waiting outside before the doors opened at 9 a.m. In Beijing, reports suggest it was arguably the least eventful launch of an Apple device in the company's four-year history in the Chinese capital.

These are very early indications and it'll take weeks before a better picture emerges on how the device is faring in China. But UBS analyst Steven Milunovich doesn't sound very encouraging, as he cut his price target today to $700 from $780 (U.S.).

"Some of our Chinese sources do not expect the iPhone 5 to do as well as the iPhone 4S," Mr. Milunovich wrote in a research note, via Reuters. He expects lower iPhone and iPad shipments for the March quarter.

Reuters also reported Jefferies analyst Peter Misek trimmed his iPhone shipment estimates for the Jan-March quarter, saying that the technology company had started cutting orders to suppliers to balance excess inventory.

Shares of Apple suppliers Jabil Circuit Inc, Qualcomm Inc, Skyworks Solutions Inc, TriQuint Semiconductor Inc, Avago Technologies Ltd, and Cirrus Logic Inc. also fell in early trading.

Mr. Misek cut his first-quarter iPhone sales estimate to 48 million from 52 million and gross margin expectations for the company by 2 percentage points to 40 per cent.

Part of the problem may very well be tied to Apple's lack of success so far in striking a deal with China Mobile, the country's top telecom. Those talks have been going on for four years and have given other smartphones the upper hand in gaining sales traction. Talks between the two sides are being held up by complex issues of revenue sharing. Apple ranks only sixth in smartphone providers in the country, according to July-September data from research firm IDC.

Shares in Apple have lost more than 25 per cent since closing at a record high on Sept. 19. A week ago, the stock formed a "death cross" on the charts, which is where the 50-day moving average crosses below the 200-day moving average. It remains in that state as of today.

With files from Reuters

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