Apple is one of the biggest technology manufacturers in the world, who have seemingly gone from strength to strength in recent years. On September 9th 2014 Apple hosted their biggest event to date in order to launch three new products. These products were the iPhone 6, iPhone 6 Plus and the Apple Watch. Everyone was watching with baited breath to finally to get answers to questions surrounding what they looked like and their features. But, investors were watching from a different perspective. They were asking one big question, what effect would the iPhone 6 launch have on Apple’s stock price.
In Q3 2014 the iPhone contributed almost $20 billion to Apple in revenue, a phenomenal amount considering how far into its lifeline the iPhone 5 series was. Following this the usual speculation began about the iPhone 6, “leaded” images made their way around the Internet and tech bloggers began to speculate about potential features. In fact, the entire process has now become stereotypical when it comes to the launch of an Apple product.
History stands for itself, as post iPhone announcements the reaction can be fairly unpredictable, which probably won’t be what those buying Apple shares will want to hear. After the launch of the iPhone 3G Apple shares took a 7% hit, yet after news of the iPhone 4S reached the public it went up by 10%. It all makes up for a bit of a bizarre situation, as history can’t really answer the question of how Apple shares will react after the iPhone 6 launch.
It may not be the most adventurous move in the stock trader’s handbook. But, during the actual announcements trading of Apple shares tends to grind to a halt. People tend to opt to hold their position rather than speculate or trade and there is data that supports this motion. Apple has provided an average of a 23% return on their shares over 6 months post-release, and 25% after 12 month post-release. It shows that should you already have Apple shares it pays to hold onto them throughout an announcement. If you want to buy Apple shares try and get in before hand should you want shorter-term results.
Apple has lost a lot of their market share during the build up to the iPhone 6 release, so much in fact that the phone had to deliver. Sadly, it was met with a lukewarm reception rather than the runaway optimism of years before. It still came across to both investors and the buying public as behind the times. Apple has enough cash in the bank proving that they can still sell a lacklustre product on name alone. But, the dip in stock price by the end of announcement week showed that confidence in the iPhone product is fading.
Everyone watched the iPhone 6 announcements with eager eyes, but the public opinion on what they saw was mixed. The phone itself didn’t quite step up as it should have done and as history has shown post release Apple shares can fluctuate wildly. Apple shares post release always recover over time, but as the product interest decreases such recovery might be slower after the launch of the iPhone 6.