Rotten Apple: How the giant lost $165 billion

APPLE has lost more than the combined worth of Rio Tinto and Telstra in the last two months.

APPLE has lost almost a quarter of its value in the past two months, shedding more than the combined worth of Rio Tinto and Telstra.

The company's share price posted its eight consecutive week of losses last week, dropping to just over $US527 ($507.9).

Since hitting a record high of $US705.07 a share in September the company's market capitalisation has dropped by $US170 billion ($165 billion), and is now worth $US493 billion, Reutersreports.

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But why has the tech giant fallen so hard, so fast? Especially as it leads into the Christmas season with a raft of new products including the iPhone 5, iPad, iPad mini and updated computers.

Many analysts say it is because taxes on capital gains are expected to rise next year as part of a deal to avoid the US "fiscal cliff".

Apple shareholders have enjoyed large embedded capital gains as a result of the company's strong performance, are selling their stock now to lock in their gains before the new rules come in.

"Some of the selling is being driven by these tax decisions, but the flip side is there is not a lot of buyers because the buyers are procrastinating to see how the negotiations come out," said Bucky Hellwig, senior-vice president at BB&T Wealth Management.

The company is also facing much fiercer competition from the likes of Amazon, Google and Microsoft, with Apple's share of the tablet market falling to 50 per cent last quarter from 66 per cent in the second, the (UK) Telegraph reported.

Apple could also simply be losing its shine, as its meteoric growth slows and the company starts to transition into a "more traditional, high quality branded company", the tech blog AllThingsD reported.

The falls are also related to a broader decline on the US stockmarket, however Apple's plunge - which neared 28 per cent last Thursday - is much higher than the descent of the S&P 500 which has fallen just under 7 per cent.

Some are questioning whether the company can continue innovate in the same way it did when the late Steve Jobs was at the helm.

But Ed Zabitsky, a technology analyst at ACI Research in Toronto, told the Telegraph: "He (Mr Jobs) was an innovator but far from the only one within Apple."

Mr Zabitsky will be keeping a close eye on sales of the iPhone 5 sells in the lead-up to Christmas.

"There will always be a lot of people who live their lives around Apple," he said.

"[But] there are a lot of fairweather friends too."