The iPhone 6 launch: Hot-or-not for Apple's stock?

By John Spence

Apple fans can't wait to get their hands on the new iPhone 6, but the upcoming launch could also provide an opportunity for investors to scoop up Apple shares at a cheaper price.

The stock tends to dip when a new iPhone is revealed, then recover the loss before moving to even higher ground.

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Apple is trading around $100 after hitting a record high, adjusting for the company's recent 7-for-1 stock split.

Now, all eyes are on the iPhone 6 launch, and iPhones account for the majority of Apple's sales.

The graphic below from Trefis shows projected revenue for various Apple products, with the iPhone representing the lion's share: (click to enlarge)

 
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Revenue from Apple products, by year

 

Buy the dip?

Interestingly, the last time Apple shares were trading at this level was back in 2012, shortly before the launch of the iPhone 5. The stock dropped sharply in late 2012 and early 2013, and has only recently recouped those losses.

In fact, Apple shares tend to decline after the company releases a new iPhone, as Crabtree Technology portfolio manager Barry Randall recently pointed out. Then, Apple shares eventually start rising again after the post-launch dip.

The chart below from Phys.org shows how Apple shares have reacted to iPhone launches. The stock is currently back to about $700 on a pre-split basis:

 
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Apple share price at each prior iPhone launch

 

Record iPhone sales projected

On Wall Street, some analysts are predicting record-breaking sales out of the gate for the iPhone 6. For example, RBC Capital Markets estimates iPhone sales could hit 10 million units in the first week, and 75 million in the first quarter.

" As great as this would be for Apple, one thing is certain - every new iPhone model has experienced a better start than its predecessor," says Felix Richter at Statista.