Apple held its big iPhone X / iPhone 8 reveal yesterday, and as anticipated, it is one of the biggest iPhone improvements in recent memory. The iPhone has been condemned by tech and gadget blogs for years because many feel that the iPhone has rested on its laurels from an innovation standpoint. And shareholders of Apple have always feared that Apple’s reliance on the iPhone’s market share coupled with their lack of innovation in the market created a scary scenario.
Weeks prior to the iPhone X launch, investor news sites had mixed predictions. Many felt the iPhone X reveal would cause Apple stock, which had been surging over recent months, to continue to rise. Some blogs even felt the iPhone could topple the $200 / share ceiling. That was incredibly bold and ambitious insight from seasoned investors. Others felt the new iPhone wouldn’t move the needle much, or, it would knock the shares down just a bit. Apple shares can sometimes fall after iPhone launches when investors see real time quarterly numbers and predict Apple executives getting paid out.
Well, a couple of things happened:
- The new iPhone was revealed and people love it.
- The stock price fell.
So what the heck happened?
First, the new iPhone X has wireless charging, facial recognition and incredibly fast charging speeds. These are all big updates to a smartphone that’s been criticized for not keeping up with Android innovations. So then, if everyone loves the iPhone, what the heck went wrong for investors of Apple shares?
The primary reason for the Apple share price decline is that Apple set the new iPhone’s order date all the way in October. Shares immediately fell to $160.82, they’ve tumbled to $158.77 as of this morning. Additionally and awkwardly, the facial recognition technology didn’t work during the live presentation.
In a statement via CNBC, Apple said: “When we issued guidance for Q4 in July, we anticipated that the iPhone X would begin shipping in fiscal Q1.” Apple is currently in its fourth fiscal quarter, which began July 2.
“This stock rallied right up into the unveiling of this,” said Peter Boockvar, chief market analyst at Lindsey Group. “There was chatter going into this that there were going to be glitches and delays. … We priced this phone in already.”
Apple also spent a little too much time discussing their new facility in Silicon Valley. A new facility just means more expenditures for the company, which investors tend to not appreciate so much.
Nothing has fallen outside the realm of tradition in terms of Apple stock, at least just yet. It is not uncommon for Apple shares to surge a bit before a new iPhone reveal and to get humbled just after the announcement happens. Apple’s iPhone still dominates most of the smartphone market and will continue to dominate it, although, the $1000 price tag on the new phones could persuade consumers to try the competition.
I don’t think I’d sell my Apple shares just yet. Apple also potentially has Artificial Intelligence on the horizon which could place them in an entirely new market share. AI stocks have surged over recent months as investors anticipate AI to be the next big investment horizon. As long as Apple continues to dominate the smartphone market, they will be more than stable. Additionally, they will always be ripe to launch new successful products because their iPhones allow them to message potential consumers of their products with fast ease.