What Does Apple's Stock Drop Say about the iPhone 4S Launch?

Paul Lilly

After months and months of hype, leaked information, rumors, speculation, and even another bungled bar room scene , Apple yesterday finally introduced its next generation smartphone, the iPhone 4S. It's not the iPhone 5 many were expecting, nor does it look any different than the iPhone 4, but it does sport several improvements underneath the hood, including the same dual-core A5 processor found in the iPad 2. So how did investors react?

Not real favorably. We won't make a mountain out of a mole hill here, but it's somewhat telling that Apple's stock dropped $2.10 after the iPhone 4S launch, though it was still worth $372.50, according to an AP report . As of this writing, Apple's stock is down about another $5. What gives?

AP quotes a portfolio manager for the Capital Advisors Growth fund as saying expectations are simply "unrealistic" for Apple product launches. That might be true, but it doesn't always play out that way either. After unveiling the iPad in 2010, Apple's stock rose $1.94, and it went up $7.10 (8.3 percent) after introducing the original iPhone in 2007.

The reality is people were expecting an iPhone 5 and they were introduced to a souped-up iPhone 4 instead, one that's decidedly better, but not really groundbreaking

"Sure seems to be much about nothing," MaximumPC.com reader 'jgrimoldy' posted in our own coverage of the iPhone 4S launch. "I wasn't aware that the slower processor in the iPhone 4 was the source of poor performance or much bitching. I don't know what I was really expecting, but this seems to be rather meh."

It seems investors feel the same way.

Image Credit: Apple

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