Apple investors: Buy the phone, sell the watch
Apple shares on Tuesday were generally bought on the rumor but sold on the news — a broad range of it, in fact — raising the question of whether the late-day drop was a reflection of new investor concerns or day-trader profit-taking on the day of an Apple event.
The company’s shares AAPL started to rally as CEO Tim Cook gave details and pricing info on the new iPhone 6 and iPhone 6 Plus.
That suggests investors are comfortable with the new smartphones’ mix of features and price.
The stock had another run, gaining more than 4% on the day, after the Apple CEO was touting Apple’s entry into the mobile payments market.
But the shares turned decidedly down about the same time Cook and other Apple executives took a rather long time getting to the price of the new Apple Watch.
The broader market also turned down, muddying the water as to whether Apple – which constitutes a sizable chunk of the Nasdaq Composite Index market value – was leading late trading or following it. It ended with a slight loss.
With a price tag of $349, the Apple Watch is a versatile device – with everything from a GPS to a heart-rate monitor — and with a user interface that might be the company’s best software design breakthrough in several years.
But given that it needs to be paired with an iPhone, there’s a question about how much of a consumer’s gadget budget Apple can command with a device that is roughly the same price of a high-end smartphone.
Unlike with its improved iPhones – always a hit with Wall Street – and a payments business that looks so far like a good financial move for Apple – with the Apple Watch the company is trying to create a new product category.
That’s a riskier proposition, and investors usually don’t react well to new risks.
Source: Usatoday
