San Francisco - Apple dipped below $400 for the first time since April as a glut of unsold iPhones prompted Jefferies & Co. to lower its target price, and Global Equities Research said low morale is causing employee departures.

Apple, the world's most valuable technology company, dropped 3.3 percent to $399.78 at 1:09 p.m. in New York. The stock had dropped 22 percent this year before Monday, compared with a 12 percent gain for the Standard & Poor's 500 Index.

The stock has retreated more than 40 percent from a record high in September amid concern about Chief Executive Officer Tim Cook's ability to release a new breakthrough product as the iPhone faces stiffer competition.

Retailers and wireless carriers have twice the normal levels of iPhone inventory, indicating that Apple is selling fewer handsets than expected, Peter Misek, an analyst at Jefferies said. Trip Chowdhry, an analyst at Global Equities, also said morale is low and more Apple employees are seeking work at companies such as Google Inc. and Facebook Inc.

Apple is "a whipping boy of Wall Street right now," Laszlo Birinyi Jr., the founder of Birinyi Associates, said in an interview with Bloomberg Television on Friday.

For the second half of this year, Apple will build a maximum of 85 million iPhones, Misek wrote in a research report, less than his prior estimate for 110 million units. He rates the shares a hold and cut his target price to $405 from $420.

The stock slump is being felt by workers, Chowdhry said.

"Recruiters are seeing more and more employees from Apple applying for jobs at Google, LinkedIn, Face book and even Hewlett-Packard," Chowdhry wrote in a research report.