Apple Inc (NASDAQ:AAPL) stock has generally declined on the day of iPhone related announcements. What does today hold for Apple stock?
For all the iPhone fans, the wait is over. Apple Inc (NASDAQ:AAPL) will finally reveal its latest iPhone model, likely to cost a thousand dollars, today at the Steve Jobs theater. For over a year, Apple fans and analysts have been talking about the tenth-anniversary issue of the smartphone. There have been multiple leaks and speculations about the features the new iPhone will have. Rumors suggest an OLED edge-to-edge display, no physical Home button, a vertical dual-camera setup, wireless charging, and other brand new features will debut on the high-end of the upcoming iPhone. Analysts have upped their price targets on AAPL stock anticipating a huge demand for the latest iPhone. Apple stock has rallied over 50% in the last one year, on the hopes of an "iPhone super cycle".
Apple stock has returned 13.58x since the first announcement.
Apple stock has soared 1,122% since then-CEO Steve Jobs first stood on stage to announce the first iPhone, declaring: "Every once in a while, a revolutionary product comes along that changes everything." Including dividends, the stock has returned 13.58x since then. The first iPhone cost $600. If you had invested that sum in Apple stock instead of buying an iPhone, your investment today would be worth $8,148. The S&P 500 meanwhile rose about 76%. Apple has sold over 1.2 billion iPhones since its launch and the iPhone has generated more than $760 billion in revenues for the Cupertino based tech giant since inception.
Apple Watch And Apple TV will also see big upgrades.
Apart from iPhone X, Apple is set to announce a few other products today including the Apple Watch 3, an Apple TV with 4K support, updated versions of the iPhone 7 and 7 Plus and more. The new Apple TV will stream 4K content and highlight "live television," including news and sports. Apple is also testing an updated version of its TV app, that can aggregate programming from apps that already offer live streaming. Apple is hoping that the new updates will help increase the demand for the device. Apple TV trails devices from Roku, Amazon ( Fire TV) and Google (Chromecast) in the U.S. set-top box market with a share of 21 percent as of the end of July this year.,
Apple will also reveal its much anticipated Apple Watch Series 3. There were rumors that Apple Watch will come with a cellular connectivity. But a recent report by KGI Securities analyst Ming-Chi Kuo suggests that Apple Watch will have LTE connection, which will allow for data transfer, but no calls. Either way, it is going to be a big upgrade and could drive the already strong demand for Apple Watch higher. Apple Watch sales have been gaining momentum. In the third quarter, Watch sales jumped by 50%. According to the IDC report, Apple's market share in the wearables segment jumped from 9.6% last year to 13% in the quarter ending June 2017.
Apple Inc will make a big break through in AR.
It is not only hardware that Apple will be launching today. The iPhone maker will also be showcasing ARKit. First announced at the company’s World Wide Developer Conference (WWDC) in June, ARKit is the company's in-house technology which enables developers to build their own augmented reality apps for iPhones and iPads. It’s a set of tools to build programs that use the phone’s camera to track its position in the real world, and then superimpose visuals or information.
ARKit is compatible with devices as old as the iPhone 6s, which means it will open up around 200 million devices to app developers. With it, developers will be able to overlay digital animations and objects over a camera view of the real world. ARKit uses a technology called simultaneous localization and mapping, or SLAM, to recognize objects and their position relative to the camera. Aside from gaming, this will have applications in social media, navigation, home decor and others. IKEA, for example, plans to release a new augmented reality app called "IKEA Place" that lets you drop virtual furniture into a home. For many, this is a bigger revolution than iPhone 8. Tim Cook has been gushing about this new technology, telling The Independent in February "I regard it as a big idea like the smartphone."
Will Apple stock rally even higher?
Apple stock gained 1.8% yesterday, closing the trading session at $161.5, bouncing back after testing the 20-day moving average support line. The question is will Apple stock rally after the launch? Well, if you go by history, the stock may not have a good day today. According to a CNBC study, Apple stock closed lower 75 percent of the time on the days it made iPhone announcements. For the 11 instances, the stock finished flat on average, with a gain of 0.04 percent. Though the study also found that the day after the launch Apple stock gained 60% of the times. A lot will depend on whether the company is able to deliver on the heightened speculations. The bar has been set very high for Apple and any disappointment could lead to a sell-off in Apple stock.
There are also speculations that Apple stock could sell off in the months following the iPhone launch, given the massive 40% rally in Apple stock this year and high valuations. Gene Munster, a managing partner at Loop Ventures and a well-known Apple analysts expects the stock to fall by 8%-10% in the next few months. There are also speculations of severe shortage supplies which could derail the launch. However, the stock could see decent gains, if it is able to deliver on the expectations. Apple stock is part of our top stocks to buy portfolio which has outperformed the Nasdaq Composite by over 140%.
Looking for fundamentally better auto stocks than Tesla? Check out Amigobulls' top picks from the auto sector, which have beaten the S&P 500 by over 246%. If you're a trader though, you should check out our daily trading ideas section for daily, free updates on the latest crossovers and other popular technical signals.