Has the IPhone reached saturation point?

Apple shares drifted below $500 on Monday, following reports the company had cut orders for certain iPhone parts due to weaker-than-expected demand for the latest version of the popular smartphone.

The selling continued Tuesday after analysts at Nomura Securities lowered their earnings estimates for Apple and warned that profit margins on the iPhone "are unsustainably high and will fall."

"We are cutting our Apple estimates this morning to reflect weaker-than-expected sales of the iPhone 5 as indicated by our checks," Nomura analysts wrote in a report.

Shares in the iPhone maker ended the day at $485.92, down just over 3 percent for the day after having closed yesterday at $501.75. In trading today, Apple's stock never rose above the $500 mark.

On Sunday, The Wall Street Journal cited sources who said that Apple had cut component orders for its iPhone 5 due to slumping demand for the handset. That bad news pushed Apple's shares lower yesterday as investors became concerned with the company's ability to compete as effectively in the mobile market.