Investors not wowed by Apple's iPhone 7 launch
There was a time when investors joined Apple (AAPL) enthusiasts and journalists in devouring every detail of the company’s splashy technology launches.
By contrast, Wall Street seemed to greet Wednesday’s introduction of the iPhone 7 with a collective yawn.
The tech giant’s share price barely budged during its much-hyped event in San Francisco even as media outlets churned out updates on the new new device (water and dust resistant, with stereo speakers, much-improved camera, longer battery life, and --- the horror -- no headphone jack).
At the end of trading Wednesday, Apple’s stock was up only 66 cents, or 0.6 percent, to $108.36 -- not exactly the kind of bump that signals investor excitement.
But the event did give a big, if inadvertent, lift to another stock -- Nintendo. The video game company’s shares surged more than 25 percent after Apple CEO Tim Cook said Super Mario will make its App Store debut with a game called Super Mario Run. Nintendo’s “augmented reality” gaming hit Pokemon Go also is set to debut on the second-generation Apple watch, which will feature built-in GPS, a brighter screen and a new hiking app.
Apple gets dinged in some quarters for a lack of surprising new products or innovations since the death of founder Steve Jobs. But it’s also harder for the company to surprise Wall Street given the unyielding attention from analysts and journalists, who often get wind of product changes via supplier leaks.
For instance, the lack of a headphone jack on the iPhone 7 came as no surprise, with dozens of stories teasing the change ahead of Wednesday’s launch. Apple did manage to make some news in unveiling its new wireless AirPods -- namely, that they’ll set you back $160.
It’s hard to overstate how much Apple, the world’s biggest company by market capitalization, leans on the iPhone for growth: The phone accounts for more than two-thirds of its annual revenue. And with more than 1 billion iPhones sold to date, it has become increasingly difficult for Apple to find new customers, or persuade existing ones to upgrade to the latest model.
That’s why the company views events like the one Wednesday as critical, and leaves no detail -- including a new iPhone finish called Jet Black -- to chance.
Along with showing off the latest iPhone, Apple also unveiled new faces and configurations for its watch. Though the timepiece has sold fairly well -- Apple said its product was second worldwide in watch sales in 2015, behind only Rolex -- it became clear early on that the wearable device wouldn’t be a game-changing product on par with the iPhone.
It remains to be seen if consumers queue up for Apple’s latest gear, but for investors it may be a case of wait ‘til next year.