Chinese people walk spiral steps of a newly-opened Apple Store in Wangfujing shopping district in Beijing. AP Photo/Andy Wong
It was the worst single-day decline for Apple since December 17, 2008, according to Michael Gayed, strategist at Pension Partners.
Apple's popularity among gadget fans dropping
The decline also wiped out some $35 billion in value for Apple, whose market value is now some $506 billion.
There has been no single catalyst for Apple losing its luster, although some analysts say it has lost its edge in innovation, and that its iconic iPhone and iPad are facing tougher competition.
Only 18% of US consumers want an iPad mini
Another factor was a disappointing earnings report in October from Apple, which in recent years has powered past analyst forecasts.
"There are plenty of reasons to say the stock is done," said Michael James, at Wedbush Securities.
"It's becoming a show-me story, they're going to have to meaningfully beat estimates on the next report."
An iPhone 5 is displayed in an Apple store in central Sydney shortly after going on sale to the public. Reuters/Tim Wimborne
James said a lack of information from the secretive California giant also has the market nervous: "Chatter, rumors and traders sentiment are all going to move the stock meaningfully without any comments from Apple."
A report from the research firm IDC underlined those concerns, saying that tablets powered by the Google Android system are gaining on the market-leading iPads.
Google's Android is eating Apple's lunch
IDC now expects Android's worldwide tablet share to increase to 42.7 percent for 2012 from 39.8 percent in 2011. Apple's share is expected to slip to 53.8 percent from 56.3 percent in 2011.
Trip Chowdhry at Global Equities Research said the market was also jolted by reports that Apple had shifted production of some iMac computers to the United States.
Apple slims down iMac
"Apple quality is phenomenal, but you can't overnight produce something in a different location and expect the same kind of quality and cost structure, and that is creating anxiety," Chowdhry said.
Jody Giraldo at EquityStation said some investors are merely locking in gains before the end of the year.
"The stock had a very good run over the year and it seems a lot of people continue to sell to lock in some returns," he said.
Phil Schiller, Apple's senior vice president of worldwide product marketing, talks about the thinness of the new iMac in San Jose, California. AP Photo
"A lot of managers here in the states are behind in terms of their return versus the S&P (index) and they take all the profits where they can."
Jon Ogg at 24/7 Wall Street said Apple's stock problem is more technical than fundamental, but also said the market is no longer expecting a one-time special dividend which would be a boost.
The analyst noted that technical trades focus on performance metrics and that because Apple shares have been underperforming, some portfolio managers and computer programs are driven to sell.
Apple expected to launch a TV before the end of 2013
"The issue we see on the chartist side of the equation is a coming death-cross chart pattern in the next few days," he said.
"This is a bearish chart pattern that occurs when the 50-day moving average crosses under the 200-day moving average, hence the death-cross."