Is This the Apple Apocalypse?

Apple (NASDAQ:AAPL) was in plunge mode on Wednesday — dropping 6.43 percent to $538.79 — after an IDC research report said the company’s share in the global tablet market was likely to slip to less than half by 2016. Shares are recovering in morning trading on Thursday, but not enough to compensate for Wednesday’s losses.

What is Leading to Apple’s Weak Position?

The iPad’s share of the market was 56.3 percent last year, but increased competition from the likes of Microsoft (NASDAQ:MSFT), whose Surface tablet is predicted to garner more than 10 percent share by 2016, will hurt Apple, the IDC report said. The IDC added the iPad could be down to 53.8 percent this year, even as Google (NASDAQ:GOOG) Android devices rise to 42.7 percent from 39.8 percent last year.

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Some analysts also attributed Apple’s fall to uncertainty over tax rates on capital gains in the coming year. “Depending on what happens with the (U.S. fiscal negotiations), rates could rise next year or they could stay the same,” Performance Trust Capital Partners’ Brian Battle told Reuters. “They will not be lower, so if you’re an investor who has seen gains in Apple, it is better to take those gains this year rather than next.”

Also adding to worries was Nokia’s (NYSE:NOK) announcement to partner with China Mobile (NYSE:CHL). While Apple has not yet been able to reach a deal with the world’s biggest mobile operator in terms of subscribers, the Finnish company’s lead on a partnership could help it gain back Chinese market share from the iPhone…