Shares in the iPhone manufacturer fell 3.7% on Tuesday, dropping its market capitalization to $1.989 trillion. 

Apple first surpassed $2 trillion in market capitalization in August 2020, as consumers flocked to its devices amidst the COVID pandemic. The Cupertino-based company even briefly reached a market capitalization of $3 trillion on Jan. 3, 2022, almost exactly a year ago.

Yet Apple shares have fallen sharply since then. The company’s shares fell 27.2% in 2022, performing worse than the broader market. The S&P 500 fell 19.2% over the same period.

Yet Apple shares still did better than other companies in the tech space, with Alphabet and Amazon shares falling 38.8% and 50.7% respectively over 2022. 

Apple is still the world’s most valuable company, ahead of Saudi Aramco and Microsoft, which both slipped from a $2 trillion valuation last year. 

Falling Apple

Apple, like other device manufacturers, is facing a weaker market for consumer electronics. Apple is telling suppliers to manufacture fewer components for devices like its AirPods and MacBooks due to weaker demand, reported Nikkei Asia.

Consumers splurged on computers, tablets, and smartphones throughout the COVID pandemic, thanks to stay-at-home orders and stimulus money. Yet inflation and a weaker economy could suppress consumer demand for new electronics.

The iPhone manufacturer is also being hurt by COVID disruptions in China, which is both a large market for, and major manufacturer of, Apple products. 

The company warned in November that iPhone shipments could be affected by “significantly reduced capacity” at Foxconn’s factory in Zhengzhou.

Employees at the Apple supplier violently clashed with security personnel in late November, as migrant workers worried about COVID controls and the risk of getting infected. 

Foxconn now says its Zhengzhou factory is back to normal staffing levels, and is shipping phones at 90% capacity, according to local paper Henan Daily.