Why Apple falls after new product announcements

Oct 05, 2011 By CHIP CUTTER , AP Business Writer
Apple's Phil Schiller talks about the iPhone 4S during an announcement at Apple headquarters in Cupertino, Calif., Tuesday, Oct. 4, 2011. (AP Photo/Paul Sakuma)

(AP) -- Here's a market riddle for you: Why does Apple's stock fall on the same day the company reveals a new product?

A hot gadget would seemingly give reason to buy more shares. But, since early 2007, the stock has fallen about half the time following a major product announcement. That's either because of high investor expectations or sheer bad timing, such as when Apple debuts a product on a day that the rest of the is falling.

Apple Inc.'s stock lost $2.10, or 0.6 percent, dipping to $372.50 on Monday after the company revealed the newest iPhone model, the 4S. That version will be faster and more powerful than previous models. But some analysts had anticipated a more dramatic upgrade.

"Expectations for Apple's product roll-outs have become really unrealistic," said Channing Smith, a portfolio manager of the Capital Advisors Growth fund, which owns Apple stock. "What are (investors) expecting?"

Here's a look at how Apple's stock has performed after major product announcements over the past four years.

Oct. 4, 2011 - Apple reveals the iPhone 4S. But it's not the that some analysts and tech bloggers anticipated. Apple's stock falls more than the broader market, dropping 0.6 percent. The Standard & Poor's 500 index rises 2.3 percent.

March 2, 2011 - Apple CEO Steve Jobs briefly returns from medical leave to introduce the second version of the iPad tablet computer. It is noticeably thinner than the original tablet and also faster. Apple's stock rises $2.81, or 0.8 percent, to $352.12.

June 7, 2010 - Apple introduces the fourth version of its iPhone. It comes with a second camera on the front that can be used for videoconferencing. The device also has longer battery life. Apple's stock falls $5.02, or 2 percent, to $250.94. On the same day, the Dow Jones industrial average and the Standard & Poor's 500 index both plunge to their lowest level of the year because of concerns about Europe's economic problems.

Jan. 27, 2010 - Apple unveils the iPad, a tablet-style computer that resembles the iPhone. Prices will start at $499, far below the $1,000 that some analysts were expecting. Apple's stock rises $1.94, or 0.9 percent, to $207.88. The S&P 500 rises 0.5 percent.

June 8, 2009 - Apple announces the new iPhone 3GS, a newer version that will come with a faster processor, longer battery life and other features such as an internal compass. It also slashes the entry price for an iPhone in half. Apple falls 82 cents to $143.85.

June 9, 2008 - Apple introduces the iPhone 3G, an upgraded phone with a faster Internet connection, GPS capabilities and a lower price. But Apple's stock falls $4.03, or 2.2 percent, to $181.61 as investors worry that the reduced price could hurt Apple's profit margins.

Jan. 15, 2008 - Apple debuts new MacBook Air, an ultra-slim notebook computer that weighs just 3 pounds, and an online movie rental service. The stock falls $9.74, or 5.5 percent, to $169.04 on a day when many technology stocks plunge on concerns about a slowdown in consumer spending.

Jan. 9, 2007 - Apple unveils the first , to be priced at $499. Jobs says the phone will "reinvent" wireless communications and "leapfrog" past the current generation of smartphones. Apple's stock rises $7.10, or 8.3 percent, to $92.57.

Explore further: Ex-Apple chief plans mobile phone for India

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Apple gives Tim Cook 1 million shares

Aug 27, 2011

(AP) -- Apple has given Tim Cook 1 million shares of restricted stock as he takes over as reins of the company from Steve Jobs. At current prices, the stock package is worth more than $383 million.

Recommended for you

Ex-Apple chief plans mobile phone for India

1 hour ago

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

14 hours ago

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

US venture investments highest since 2001 (Update)

Apr 18, 2014

Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.

User comments : 0

More news stories

Ex-Apple chief plans mobile phone for India

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

Health care site flagged in Heartbleed review

People with accounts on the enrollment website for President Barack Obama's signature health care law are being told to change their passwords following an administration-wide review of the government's vulnerability to the ...

A homemade solar lamp for developing countries

(Phys.org) —The solar lamp developed by the start-up LEDsafari is a more effective, safer, and less expensive form of illumination than the traditional oil lamp currently used by more than one billion people ...

NASA's space station Robonaut finally getting legs

Robonaut, the first out-of-this-world humanoid, is finally getting its space legs. For three years, Robonaut has had to manage from the waist up. This new pair of legs means the experimental robot—now stuck ...

Filipino tests negative for Middle East virus

A Filipino nurse who tested positive for the Middle East virus has been found free of infection in a subsequent examination after he returned home, Philippine health officials said Saturday.

Egypt archaeologists find ancient writer's tomb

Egypt's minister of antiquities says a team of Spanish archaeologists has discovered two tombs in the southern part of the country, one of them belonging to a writer and containing a trove of artifacts including reed pens ...