What if They'd Just Called it the iPhone 5?
Unless you’re living under a rock, you’re probably aware that Apple unveiled a new iPhone yesterday. At what turned out to be a relatively muted Apple product launch, it was new CEO Tim Cook‘s first chance at replacing Steve Jobs as product pitchman. It seems he did just fine.
The new iPhone is loaded with cool new features that the market was anticipating, with one exception: it’s not called the iPhone 5, it’s called the iPhone 4S.
By the time it became obvious that Cook wasn’t going to introduce anything called an iPhone 5, (about 1:50 pm EST yesterday), the stock price began to plummet pretty quickly, as you can see in the chart below. From 12:15 pm to 3:15 pm, the price dropped more than 6%. Also, note the spike in volume at the bottom.
So the question is: what if they’d just named it the iPhone 5? Would the stock have dropped so much, if at all? My guess is no, especially when you look at the recovery the price had late in the day, and the gains it’s made today. Once people actually had a chance to see all the new stuff the phone had, and stopped simply trading off the name itself, they realized that Apple had in fact introduced a new product. So, Apple marketing fail? Or knee-jerk market fail?