All eyes are on the Apple Inc. (AAPL) “Let Us Loop You In” event today — even if it’s probably not going to be a major mover of Apple stock.
Well, not if the rumors are true.
AAPL is expected to unveil some cool stuff today, but it won’t be firing off the kind of products that could shake Apple stock out of its extended slump.
Investors cooled off on shares when it became clear that the latest iterations — the iPhone 6s and iPhone 6s Plus — weren’t as popular as last year’s iPhones. Sales of the critical gadget were flat in the most recent quarter and are expected to decline in the current quarter.
That would be the first ever year-over-year drop in iPhone sales.
Since the iPhone segment is by far away the company’s most important business, this slowdown has been giving the market fits. Indeed, Apple stock is off about 20% from its most recent high, which was nine long months ago.
Happily, all it will take to get AAPL moving again is a new hit iPhone.
Not so happily, Apple isn’t going to drop that at Monday’s conference … if Apple-watchers are right, anyway.
Apple Stock Could Get a Little Pop, But Not Much Else
On the iPhone front, multiple media reports say Apple will debut a significantly smaller iPhone today. It’s thought to be called the iPhone 5se, and the new handset will feature a 4-inch touchscreen. By comparison, the iPhone 6s and 6s Plus have screens of 4.7 inches and 5.5 inches, respectively.
If the iPhone 5se resonates with consumers, it could give AAPL’s smartphone business a nice jolt, but it’s not the handset that carries the weight of turning around the company’s fortunes. That will presumably be the iPhone 7 launch later this year.
AAPL also is expected to drop a smaller version of its iPad Pro tablet. With a 9.7-inch touchscreen, it will be the same size as iPad Air. Of course, Apple’s iPad segment — like the entire tablet market — isn’t really a source of growth.
Software updates to iOS and perhaps OS X could also be on the agenda, along with some other more incremental releases.
No, this isn’t the event that will reverse the slide in Apple stock, but it’s not intended to be. Analysts applaud Apple’s strategy of attracting share outside of the high-end smartphone market. As analysts at R.W. Baird said in a note to clients:
“(The iPhone 5se) should help open up new pockets of demand; Apple’s global iPhone share was just 16% in 2015, due in part to its high-end focus.”
When it’s said and done, Monday’s media event could give Apple stock a short-term lift, but the real resurrection will have to wait until fall.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
