Three new iPhone models are expected with a rumored “Pro” version. They may also provide more details and big announcements on content/shows/pricing of Apple TV+ streaming service. Here is the interesting part – historically, day before event shares are flat or negative 1-2% (compared to launch day stock price) and flat or slight loss day after (everyone has extreme expectations, this is Apple after all).
So seems boring, right? Well, at the same time, historically Apple stock price goes up anywhere between 5 and 15% in the next 60-90 days following the event. Looking at the past 5 years, it tends to peak around late November (first point of inflection) or sometime in January (second point of inflection) This is due to two reasons:
- While products may not look exciting enough to investors, it’s a premium item and there is no competition to iPhone that is just like the iPhone (no one else can run iOS or use their app store). People still upgrade older iPhones for new iPhones due to upgrade lust, because they spent too much on Apple Ecosystem (watch, apps, apple TV, Mac, etc), it’s a default upgrade for iPhone business users.
- Events are typically held in September, giving Apple time to stock up inventory for holiday seasons a few months later and report on new sales and revenue. It’s an easy default gift, it’s often the “i want NEW iPhone” from kids that makes parents drop the cash. Don’t forget about Thanksgiving, Black Friday, Cyber Monday when other retailers are likely to offer Apple products (not always iPhones) are a bait to get people into their stores (Best Buy, Walmart, Fry’s Electronics, Target, etc).
It is very likely they will be continuing in trying to set themselves apart from the rest of tech companies on security and privacy features, helping with sales to the business sector. This is where security maters as young folks will give up all privacy for a badge on Snap, likes on Facebook or Instagram.
All of this helps with ER in late October. At this point they have been riding back to school sales of laptops, apps from all those college/school bound students, new phones, ear pods, apple watches and apple TV boxes for Thanksgiving holidays. Hence the peak around early November.
So I see it as an opportunity for two plays:
- Stock – by and hold 60-90 days, definitely into Christmas sales and maybe Q1 2020 when they would report even more sales.
- Calls going several months out
Of course if they blow the presentation with something that is totally incremental and not excited in any single way, none of this maters. BUT, i doubt this will be the case since they are already under heavy pressure to deliver something new and fresh and Apple TV+ and Apple Card only proves that.