Everything that was expected to announced was indeed, announced earlier this week during the media event organized by Apple Inc (NASDAQ:AAPL). People would assume that the unveiling of two new iPhones, a new smart watch, and a service to process mobile payments would be enough, but the still managed to disappoint the market. Shortly after the announcement on Tuesday, the trading price of the company’s shares closed at just under $98, which was the lowest price that the Apple stock had seen the entire month. The stock continued to fall even further in after hours trading.
Here are three very likely reasons for the fall of Apple’s stock.
1. Lack of wonder
There were no surprises at Tuesday’s launch event. Everything that Apple unveiled was fully anticipated. Features like the size of the screens for the iPhone 6 and the iPhone 6 Plus, the new mobile payments processing system, and the Apple Watch were all reported on far and wide for days, weeks, and even months prior to the launch event. While these leaks certainly boosted the company’s stock prices to high levels as the September 9th date drew closer, it also set up the shares of the company for a tumble, known as a “sell the news” drop.
If we look back at Apple’s history, four out of the seven iPhone unveilings Apple has hosted so far has resulted in shares to fall below the opening price of the stock on the first day after the launch. In these instances, the shares did not rise above that price for at least the next twenty days.
Given Apple Inc’s previous share price movement after its launch, this type of “sell the news” drop should have been anticipated. This is especially true given that Apple was not letting any information go regarding anything that could be construed as revolutionary or groundbreaking, like the original iPad or iPhone.
Samsung (OTC:SSNLF), as well as a number of other manufacturers has already taken credit for releasing smartphones with larger phablet display screens with its lines of Galaxy devices.
Additionally, Samsung, along with Intel (NASDAQ:INTC), LG Electronics, Qualcomm (NASDAQ:QCOM), and Sony (NYSE:SNE) has already unveiled their own smart watch devices, and some have even already hit the market.
In the case of mobile payments, Apple had not done anything revolutionary with that either. PayPal, Softcard, and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) have released mobile payments systems in the past, and Walmart (NYSE:WMT) and Target (NYSE:TGT0 as well as a number of other retailers have joined forces to build a mobile payment service, known as CurrentC.
2. No Sapphire Screen
Before the date of Apple’s unveiling event, Ming-Chi Kuo, an analyst at KGI Securities stated that Apple would very likely drop the sapphire screen for the iPhone 6. Multiple other media outlets also predicted that sapphire would not be the material used in the iPhone 6 large display screens. It turns out that they were correct. However, these predictions did not keep investors from driving up the price of the stocks of GT Advanced Technologies (NASDAQ:GTAT), the producer of sapphire screens and Apple’s partner. This bid up was in anticipation for the release of the first affordable large screen smartphone made with sapphire screens that would be widely available. GT Advanced Technologies also saw a sharp drop in their stock price on Tuesday, when investors finally realized that Apple would not be making the iPhone 6 nor the iPhone 6 Plus with sapphire screens.
A sapphire screen may seem like a somewhere trivial aspect of the new iPhone, but it seems like it was the most important feature that customers were looking forward to. According to a survey conducted by uSell, about 45.5 percent of respondents selected the sapphire screen as the most wanted new feature of the iPhone 6. Without a doubt this fact contributed to the disappointment felt on Tuesday.
3. No Visionary Leader
Finally, Tim Cook, the chief executive officer of Apple Inc, lacks the vision, the imagination, and the groundbreaking type of leadership that Steve Jobs brought to the company. Prior to taking the position of Apple’s chief executive officer, Tim Cook was known for his experience as a supple-chain specialist and an operations manager. While Mr. Cook may have excelled at his previous positions, he is certainly not the type of revolutionary leader that Steve Jobs was and Apple desperately needs. The lack of any revolutionary product to come out of the company since Steve Job’s death is sorely obvious. Will Apple come out with the next new product that will change the world like the iPhone or the iPad? It doesn’t seem like the Apple Watch or its new mobile payment service lives up to those standards. The company’s management board and shareholders would do well to put Tim Cook back to where his expertise is in, and put in place a young and bold visionary that can unlock Apple’s financial power and truly carry out world changing products once again.
While Apple is the producer of great products, is an incredibly successful company, and is still a safe and good investment, the company will not be able to achieve the growth necessary to become the world’s first trillion dollar company unless it finds a truly revolutionary leader or visionary management team. To truly become a growth company again, Apple must bring in a visionary leader who can guide the company in the right direction of creating new products that change lives, like the original iPhone, iPod, iPad, and iTunes.