Apple shares drop nearly 4%, erases $80 bn in market cap1 min read . Updated: 15 Oct 2020, 07:41 AM IST
- Experts said the drop is most likely temporary and is not surprising after a new iPhone is launched
Shares of American technology giant Apple Inc. fell by as much as 4% intra-day on 13 October after the company unveiled its first ever 5G iPhone. The drop wiped off approximately $81 billion from the company’s market capitalization, as investors reacted to the new launch.
Experts said the drop is most likely temporary and is not surprising after a new iPhone is launched. Apple announced four new iPhones, besides an affordable smart speaker, the HomePod Mini.
“There are multiple reasons for it. Pricing of the new devices is one. The fact that Apple has left out accessories such as charger and earphones from the iPhone 12 box is another. In terms of features also, there are minor iterations with 5G being the only big upgrade," said Varun Kannan, research analyst, Canalys, a global technology analyst firm. “Even in terms of camera there is no huge upgrade. They have added new features like Lidar (Light Detection and Ranging) sensors, which might not appeal to all. However, this is a one-time fall and Apple will recover from this as soon as the iPads do well."
“The fall in Apple’s shares could be attributed to the overexpectations that the market had from the event, including in terms of product announcements alongside the iPhone 12 series," said Prabhu Ram, head, industry intelligence group, Cybermedia Research. However, he added that the iPhone 12’s features and the aggressive pricing for the HomePod Mini “marks its move in an uphill battle" against Google and Amazon in the smart home market.
Dan Ives, analyst, Wedbush Securities, had said earlier that the iPhone 12 will be the biggest seller since the iPhone 6 back in 2014. He was one among many who expected the company to do well.
Knee-jerk reactions from investors are quite common after Apple events. Usually, the stock remains flat or shows meagre gains when investors are happy with what they see, while drops are more significant when they’re disappointed. For instance, Apple’s stocks rose 1% after the iPhone XS launch two years ago, while falling 3% and 2% in 2016 and 2015, respectively, after the launch of the iPhone 7 and 6S.
Apple’s stocks dropped to below $120 during Tuesday’s unveiling, but started rising ($121.70) on Wednesday at press time.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!