It’s official. The mystique that Apple (AAPL) used to wrap around all of its products has been replaced with mass marketability and a sense of inclusiveness rather than exclusiveness.
It remains to be seen to what extent (if any) this slow-motion morphing of the company will ultimately have on Apple stock; perhaps it won’t matter at all.
But, given the market’s tepid response to Wednesday’s unveiling of the iPhone 6s and other revamped products, it’s increasingly looking like Apple is just another consumer technology company.
If so, it’s only a matter of time before the market treats Apple stock as such.
Apple Unveils the iPhone 6s and Other Products
Wednesday afternoon’s unveilings came as no real surprise.
The iPhone 6s was the highlight, revamping the device that launched around this same time last year. This version comes with what Cook referred to as 3D Touch — a pressure-dependent way of navigating the iPhone’s interface. A camera upgrade and more speed all around are the key improvements made with this version.
It wasn’t all about the iPhone 6s, however. The much-ballyhooed Apple TV set-top box was also introduced; it will run using a relatively familiar version of iOS, with voice-assistant Siri. It’s rather clear that Apple is betting the future of television will include a heavy dose of apps, including casual games.
The struggling iPad was given a shot on the arm, too, with Wednesday’s version being it biggest yet. With a 12.9 inch screen, a stylus, and a keyboard, the new iPade Pro is clearly aimed at the workplace rather than the casual home user.
Even the recently-launched Apple Watch was put back on the drawing board. The device now runs apps directly, rather than being tethered to an iPhone doing the heavy lifting. This change will improve the watch’s effective speed. The Apple Watch is also now offered with Hermes bands … at Hermes prices.
All in all, owners of Apple stock superficially have a lot to hang their hat on as we close out 2015 and head into 2016.
As always, the new products are impressive. Equally impressive is the sheer number of products Apple had to tout.
Yet, when one really gets down to brass tacks, this unveiling event mustered very little “wow” factor with the market … consumers and investors alike were a bit underwhelmed. In fact, an intraday chart of Apple stock price indicated that as the event went forward, AAPL shares made their way from a 1:25 pm EST peak of $114 to a close of $110.15. That translated into a loss of 1.9% for the day.
Realistically, the market is starting to wonder (perhaps unconsciously) if Apple has lost its penchant for deliberately pioneering technologies and has instead resorted to playing it safe by redoing what’s already been done.
Don’t misunderstand. Apple can still “do” technology as well or better than anyone. However, following the crowd on so many fronts isn’t what attracted so many fans to Apple stock, and it’s certainly not going to keep AAPL at the head of the class indefinitely.
One specific part of Wednesday’s event underscores this idea: The fact that Microsoft (MSFT) executive Kirk Koenigsbauer briefly shared the stage with Tim Cook on Wednesday, demonstrating how well Microsoft Office worked with the new iPad Pro.
Owners of AAPL will point to the unlikely co-presenters as proof that the new iPad Pro is more marketable than ever before. But, for businesses that truly need Microsoft Office to work on a tablet, the Microsoft Surface Pro 4 is rumored to be plenty potent in the same category, perhaps negating the preference for the new oversized iPad rather than expanding it.
Even beyond the blurred line between the new iPad Pro and the Surface 4, however, owners of Apple stock must have noticed the leap between the iPhone 6 and the iPhone 6s isn’t a functionally dramatic one … perhaps the smallest generational improvement the iPhone has seen yet. A faster processor and better camera are nice, but for most consumers who simply want to play games and peruse Facebook (i.e. most consumers), they’re not game-changing upgrades.
And that trend of incrementally smaller improvements is becoming the norm. The company may be nearing the point where the upgrade cycle hits a headwind mostly because consumers are having a tough time seeing a meaningful difference in models.
Bottom Line for Apple Stock
I’ve said this before, but it merits repeating now: Apple stock on its worst day is still better than most stocks on their best day. Keep it all in perspective. But these events aren’t inciting excitement the way they used to, nor are they spurring the Apple stock price higher.
Maybe it’s just a sign of the times. In fact, it likely is a sign of the times. The iPhone and iPad were new and novel a few years ago, but there’s a been-there, done-that feel to Apple’s unveilings now. That may be because there’s a been-there, done-that feel to Apple’s products.
To that end — and this may be where trader’s can’t see the forest for all the trees — Apple hasn’t really unveiled a new category of product in years; the Apple Watch is simply an extension of the iPhone. At some point in time, Tim Cook is going to have to innovate rather than extend. Investors are becoming impatient.
Jobs: “Let’s redefine industries and change lives.”
Cook: “Let’s make a pencil. And more color options for the watch.”
It’s a harsh reality that’s sooner or later going to catch up with Apple stock.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.