Apple Shares Drop 6 Percent on Worries Over China and Tablets

Shares of Apple fell $37.05 on Wednesday after a research note predicted the company's share of the tablet market would drop to less than half in about four years.

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Also weighing on the stock was news Wednesday that Nokia was partnering with China Mobile, a move that will no doubt put a dent in in the market-share enjoyed by Apple's iPhone.

Analysts also have fretted over the "fiscal cliff" and the uncertainty surrounding tax rates, including capital gains rates that, if raised, could encourage some investors to pull money out of the stock market.

The 6.4 percent plunge in Apple shares to $538.79 amounts to a $35 billion loss in the size of its market cap, which was at $507 billion at the close of trading Wednesday.

The drop in Apple shares came despite an upgrade of the stock to "strong buy" on Wednesday from Oracle Investment Research.