Investors often ‘buy the rumour sell the fact’ when it comes to Apple shares
The Apple share price was subdued in response to CEO Tim Cook‘s launch of the iPhone 13, as well as updated versions of its watch and iPad.
The Apple share price even closed down by 0.96% yesterday after Cook divulged some of the new exclusive features of its latest release.
One of the key features of the iPhone 13 is its ability to film “portrait mode” videos with a depth of field effect.
It is only the Apple smart phone which allows users to edit this effect after filming.
This seems to be a common theme for Apple when it releases new products and “as much the result of the old formula of ‘buy on the rumour sell on the fact’ as anything else,” says AJ Bell investment director Russ Mould.
| Announced | Product | Launched | 6 Months Before | 3 Months Before | 3 Months After | 6 Months After | 12 Months After |
| 09-Jan-07 | iPhone 1 | 29-Jun-07 | 43.8% | 30.2% | 25.8% | 63.7% | 39.4% |
| 09-Jun-08 | iPhone 3G | 11-Jul-08 | (0.1%) | (5.9%) | (43.9%) | (47.5%) | (19.7%) |
| 08-Jun-09 | iPhone3GS | 19-Jun-09 | 55.0% | 37.3% | 32.7% | 40.1% | 96.5% |
| 07-Jun-10 | iPhone 4 | 24-Jun-10 | 28.7% | 17.3% | 8.7% | 20.3% | 21.3% |
| 04-Oct-11 | iPhone 4S | 14-Oct-11 | 23.7% | 18.1% | (0.5%) | 43.4% | 49.2% |
| 12-Sep-12 | iPhone 5 | 21-Sep-12 | 16.2% | 69.9% | (25.8%) | (35.3%) | (33.2%) |
| 17-Sep-13 | iPhone5GS | 20-Sep-13 | 3.4% | 12.1% | 17.5% | 13.1% | 51.2% |
| 09-Sep-14 | iPhone 6 | 19-Sep-14 | 29.1% | 6.7% | 14.1% | 8.1% | 15.8% |
| 09-Sep-15 | iPhone 6S | 25-Sep-15 | (7.0%) | (10.0%) | (5.8%) | (7.9%) | (0.1%) |
| 07-Sep-16 | iPhone 7 | 16-Sep-16 | 9.1% | 18.5% | (0.3%) | (8.3%) | 51.3% |
| 12-Sep-17 | iPhone 8 | 22-Sep-17 | 18.1% | 7.1% | 7.9% | 12.7% | 38.5% |
| 12-Sep-17 | iPhone 8-plus | 22-Sep-17 | 18.1% | 7.1% | 7.9% | 12.7% | 38.5% |
| 12-Sep-17 | iPhone X | 03-Nov-17 | 8.9% | 2.4% | 11.4% | 4.2% | 37.5% |
| 13-Sep-18 | iPhoneXS, XSMax, XR | 26-Oct-18 | 28.2% | 19.0% | (22.6%) | (11.0%) | (3.4%) |
| 10-Sep-19 | iPhone 11 | 20-Sep-19 | 25.0% | 14.8% | 21.1% | 31.7% | 109.5% |
| 13-Oct-20 | iPhone 12 | 23-Oct-20 | 60.8% | 30.0% | 5.2% | 8.1% | |
| 14-Sep-21 | iPhone 13 | 24-Sep-21 | 22.4% | 13.5% | |||
| AVERAGE | 22.5% | 16.9% | 3.3% | 9.3% | 32.8% |
However, a lot does ride on the latest iteration of the iPhone and shake-up of Apple’s product range.
“The firm continues to encounter anti-trust pressure from regulators regarding its App store – and its monster $2.4 trillion market capitalisation means that any slip or loss of earnings momentum could leave shareholders with a problem,” Mould said.
A forward price/earnings ratio of nearly 27 times prices in a lot of future growth – and analysts have pencilled in just 5% sales growth and 2% earnings per share growth for the year to September 2022.
“Hard to believe as it may be, this leaves Apple with something to prove, in terms of its ability to keep regulators sweet, persuade customers to upgrade to 5G mobile devices and shareholders that expected 70% surge in earnings per share in the year to September 2021 was not just a one-off, owing to the pandemic, lockdowns and a surge in working from home – sales growth in Mac computers and iPads showed marked signs of a slowdown in the last fiscal quarter, to June.”
Apple has already suffered four induced profit slides in the past decade
The first three were largely related to the iPhone’s product cycles and its functionality, price points and demand in China (the early stages of the pandemic contributed to the last one), according to Mould.
“The subsequent share price surge may mean that January 2020’s crunching profit warning is but a distant memory, but it does not mean it cannot happen again in the latest set of product features fail to capture consumers’ imaginations,” Mould said