Shares of Apple (AAPL)
have fallen 6.6% in the 30 days prior to Wednesday's widely anticipated
announcement of the iPhone 6S. That's a highly unusual move for the
stock that has raced higher by an average of nearly 5% in the 30 days
prior to the previous eight models. It's the first time Apple's stock
has fallen leading up to an iPhone launch since the original iPhone in
2007 - ending what had been a dependable source of returns for
investors.
Investors are counting on Apple to keep the excitement going
over its aging iPhone smartphone line, which was first introduced more
than eight years ago. The company gets two-thirds of its revenue from
this single product line, 74% of its gross profit from the iPhone and
this one product accounts for 61% of its stock price, says Trefis.com.
Other new products including the iPad, Apple Watch and Apple Music have
failed to meaningfully diversify the company's offerings - especially
profitability.
The broad market's troubles are certainly somewhat to blame
for the fall in Apple's stock price heading into the new iPhone
announcement. The Standard & Poor's 500 index dropped an even more
severe 7.2% during the same time - and has been hit with a correction.
But previously, Apple investors have viewed the company and its iPhone
upgrade cycle as something that's not captive to the ups and downs of
the market. It's a rude awaking for Apple investors - who until now -
have treated iPhone announcements as an ATM as the stock has been immune
to the vagaries of the broad market. Investors piled into Apple's stock
leading up to the announcement of a new iPhone - no matter what was
happening in the broad market.
Shares of Apple have gained in the 30 days prior to an
iPhone announcement in seven out of the past eight announcements - no
matter what was happening with the market. Apple stock even inched up
0.1% ahead of the 2011 announcement of the iPhone 4S - even though the
S&P 500 fell 6.4% during the same time period. A more dramatic
example still occurred in 2010 ahead of the iPhone 4 announcement.
Shares of Apple soared 8.5% in the 30 days prior - while the market
dropped 4.1%.
Anticipation of a new iPhone hasn't even pulled Apple stock
out of its longer-term malaise this year - which is more severe than
what's been afflicting the broad market. Shares of Apple had have been
struggling since July, falling 18% from their highs - while the S&P
500 is off just 9.8%.
As Apple gets larger - and relies heavily on a product
that's become geriatric by tech standards, investors are increasingly
difficult to impress.
APPLE'S NEXT IPHONE, FROM FORCE TOUCH TO SIRI
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The big feature Apple hopes will spur
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APPLE'S NEXT IPHONE, FROM FORCE TOUCH TO SIRI
Apple 'S' iPhone models through the years | 01:36
A walk down iPhone memory lane, as we
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Sean Fujiwara
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