Shares of iPhone maker Apple fell sharply shares at the open after The Wall Street Journal reported that the company has cut its orders for iPhone 5 components due to weaker-than-expected demand.

Its stock, which was down more than four per cent early in the session, closed off $18.55, or 3.57 per cent, at $501.75.

Monday's drop below the $500 mark was the first fall below that level since February.

The drop came after a newspaper report claiming Apple's first quarter orders for iPhone 5 screens have dropped to about half of what the company had previously planned to order.

The Cupertino, Calif., company has apparently also cut orders for components other than screens.

But three analysts for Swiss bank UBS analysts came out with a note later in the morning saying the report was old news.

"The article says Apple notified suppliers of the cut last month, which is when we and most of the Street reported it," Steven Milunovich, Peter Christiansen and John Roy wrote.

With files from The Associated Press