Apple Shares Dropped 1.7% According to "Tradition" Every Year When Announcing New Products

Apple's annual September iPhone launch is always big tech news, but this year's event has even more significance. As the iPhone maker is struggling with falling smartphone demand and China is banning central government officials from using iPhones due to security concerns.

During the event called Wonderlust, Apple introduced the Apple Watch series 9, Apple Watch Ultra 2 and the 15th generation iPhone.

Just like most years before Apple's annual launch event, Apple's stock price also performed as expected. Shares of the world's first $3 trillion market capitalization company, Apple, fell 1.7% to end the session at $176.30.

Why did Apple's stock price drop?

(AAPL stock price fell 1.7% to end the session at $176.30, source: CPT Markets​)

Apple's stock decline is part of a long-standing tradition of poor stock price performance on product launch days. With the exception of the first iPhone launch in 2007, Apple shares have fallen at almost every new product announcement.

Most investors were familiar with Apple's innovation and the news leaked before the presentation, which led to the poor performance of AAPL stock. We can say that any predictions about new products are already calculated and priced before they are announced. On the other hand, Apple is also famous for the secrecy surrounding its products so no one really knows how the product will actually work.

Although the tech giant has not increased the prices of the iPhone 15 Pro and Pro Max, the new iPhones will start with 256GB (Gigabyte) storage and the 128GB variant will no longer be available. Investors should note that the 256GB variant is approximately $100 more expensive than the 128GB variant, thus providing a synergy benefit to ASP (average selling price) and resulting in improved sales.

Many analysts expect carriers like AT&T to offer promotions to boost demand for the iPhone 15, which is key to supporting AAPL stock right now.

China imposes restrictions on iPhone usage

The offices of several Chinese state agencies are a key market for Apple (accounting for about 19.6% of revenue in the first 9 months of fiscal 2023). However, following reports of China imposing restrictions on the use of iPhones and other foreign-branded mobile devices in the country, Apple shares have lost more than 7% of their value in the last 5 trading days.

China's decision to restrict iPhones to certain government enterprises is not a positive development for the company. However, investors in the market currently expect the impact on Apple from the government ban to be minimal.

Should AAPL buy, sell or hold?

In the past 5 days, Apple's stock price has dropped more than 7%, losing more than $200 billion. However, despite the recent decline, Apple shares still recorded a 41% increase year to date.

According to data from Tipranks, Apple stock currently receives 22 BUY recommendations and 8 long-term hold recommendations. There is no SELL recommendation for AAPL. In addition, the average target of analysts is expected at 207 USD/share, meaning AAPL stock price is expected to increase by 17.47% compared to the current price.

Despite poor performance and facing a lot of bad news, investors are generally still very optimistic about Apple stock. What about your decision on AAPL stock? Trade your favorite stocks with CPT Markets and get great deals today!