The much anticipated 10th-anniversary edition of the iPhone has made its debut, but one of the few cliffhangers in its premiere didn’t help Apple stock.
Apple’s launch event Tuesday was largely a by-the-numbers affair because of a massive leak late Friday that essentially spilled most of the juicy product-related details: New features such as wireless charging and the elimination of the home button, and of course the high-end model called iPhone X. Still, initial excitement about Apple’s AAPL, -0.40% new offerings drove shares to within $1 of a record high, but investors reversed course after Apple revealed that the $1,000 smartphone would not factor into its current fiscal year.
While shares were up more than 1% at times during the two-hour presentation Tuesday, they closed down 0.4% at $160.91. The company’s shares are still up 38.9% year-to-date, while the S&P 500 index SPX, +0.34% has gained 11.5%. The Dow Jones Industrial Average DJIA, +0.28% which counts Apple as a component, is up 11.9%.
The iPhone X is set for release on Nov. 3, well after the Apple’s fiscal year closes at the end of September. Usually, Apple releases all of its new iPhones in September, providing a boost at the end of its fiscal year, and the two other phones Apple is releasing—the iPhone 8 and 8 Plus—will still release on that schedule. But rumors of production delays related to the new OLED screen on the iPhone X appear to have proved true with the delayed launch.
The premium iPhone X will ditch the physical home button, a standing feature since the late Steve Jobs unveiled the first iPhone in 2007. To deliver the same functionality, Apple has replaced the button with on-screen gestures, a widened side button to activate its personal assistant Siri and added Face ID to unlock the phone via facial recognition. Face ID failed to function properly the first time an Apple executive used it on stage at the event, though it worked for the next three tests.
While reports have been circulating for months about potential delays — to the extent that some analysts had updated their forecasts to include the possibility of iPhone sales being pushed out into the next fiscal year — Apple’s most recent guidance of $49 billion to $53 billion indicated it was confident of a boost from new iPhones in the quarter.
What’s not clear at this point, and won’t be until reports surface about the iPhone X’s popularity, is whether the new features unveiled Tuesday will entice consumers to wait to purchase the more expensive version. If it does, there’s another edge to the sword, as it could convince consumers to hold off on the new iPhone 8 models in favor of the premium version, which could impact Apple’s ability to reach its fourth-quarter goals.
Apple could have delayed the announcement of the iPhone X to potentially avoid this issue, but that could have angered Apple’s loyal customers.
“While Apple risks losing iPhone 8 sales in advance of iPhone X availability, it is the right decision to announce iPhone X now,” IHS Markit’s Ian Fogg said in an email. “Keeping it quiet until a second product launch this autumn would simply alienate iPhone 8 purchasers and damage Apple’s business in the long run.”
At its first ever product launch at its new Cupertino, Calif. headquarters Apple also announced a new version of its Apple TV that included 4K video, among other features. Executives also debuted the Apple Series 3 smartwatch, which includes cellular connectivity.