Apple Shares Lose 5% on Sony Worries

by , 4:30 PM EST, March 8th, 2005

Shares of Apple Computer dropped 5.2% Tuesday on worries that Sony's new flash memory-based music players could take a bite out of Apple's iPod empire. Sony announced new low-cost music players today in its Walkman product line that are designed to compete with Apple's iPod shuffle.

While the new Walkman models are slightly more expensive than their iPod shuffle counterparts (see TMO's full coverage for more information), Sony included support for the MP3 format for the first time. Industry watchers have seen this as critical for Sony to be able to gain significant traction in the market because of the dominance of MP3 in the digital music sphere.

The pendant-sized NW-E100 series includes three models, the NW-E103, NW-E105 and NW-E107.

Shares in AAPL closed at 40.53, a loss of 2.22 (-5.19%), on heavy volume of 36.1 million shares trading hands.

Shares in Sony closed higher at 41.02, up by 1.71 (+4.35%), on volume of 7.8 million shares.

Brad Gibson assisted with this story.

*In the interest of full disclosure, the author holds a small share in APPL stock that was not an influence in the creation of this article.