Here is a million dollar question: Did Apple (AAPL) say enough at its product conference, yesterday, to reawaken its stock into the end of the year?
The market seems to believe that the answer to that question is a resounding no. Shares of Apple fell throughout Wednesday's session, while analyst after analyst generally shrugged at what Apple had to say. I suspect that analysts will not be moving their profit estimates for 2015 and 2016 up a great deal over the next few days, as they appear to believe that Apple didn't announce anything transformational. Institutional investors, apparently, weren't too impressed either: The share price drop suggests most funds that are long Apple did not believe they should double down on their positions -- positions that have likely been hurt, recently. After all, shares of Apple are about $24 off their 52-week high, set on April 28.
Without sounding too much like an Apple fanboy that loves to blog on all things Apple, I think the company did enough to warrant investors taking a second look at its stock, on weakness. The beauty of Apple new product introductions is that although some don't initially seem world changing, they go on to become robust sellers, as they address needs people didn't even realize they had to have met. Here are a couple of reasons to strike on Apple now.
Apple Watch: Talk about a controversial few months for this product. It arrived with a ton of hype and has since been panned by the Apple product review brigade, and had its sales estimates trimmed by Wall Street. But I don't think it's that bad, out there in Apple Watch land. Is the product proving to be the next iPhone in terms of revenue drivers for Apple? Not exactly, and that has been reflected in the stock. But what Apple has on its hands for the holiday season is a product that will be high on people's wish lists (along with drones...) because of the upcoming watchOS update. The software addresses many of the issues the original Apple Watch has (I should know, I have one), and is likely to lure in people waiting on the sidelines who didn't buy months ago due to Apple Watch Fever.
In addition, the deal with high-end fashion house Hermes, for watch straps, is yet another sign that Apple is finding ways to make the Apple Watch a must-have product that has to continually be invested in by an owner, if one is to remain cool. Believe me, many Apple Watch owners will be adding new bands to their watches this season, to stay current with their fall clothes. It may sound silly, but the Apple Watch is an accessory. More bands, more profits. More sales of Apple Watches with improved software, more app sales. More bank for Apple.
Furthermore, recent smartwatch unveilings by Motorola (MSI), Samsung (SSNLF) and Sony (SNE), while nice, are unlikely to supersede the Apple Watch on a holiday wishlist. The update to the Apple Watch software keeps competitors at bay, I think.
Apple iPhone: Apple is in a year in which its suite of iPhones received minor upgrades. What Apple trotted out Wednesday, from a better camera to the 3D Touch additions, will likely trigger upgrades on the part of core Apple users. I think that's an important consideration to the investment thesis. The core crowd will want to get used to new technology that will likely become important in future iPhone iterations. As for the mainstream crowd, the new iPhone likely was the final piece of the puzzle in getting people to upgrade from the iPhone 5. Making it an easier choice is Apple's new upgrade program, which I think is a clever element that got lost in the all of the product discussions on Wednesday. Couple that with the fact that phone carriers are crazy for installment plans, right now, and it sets up the holiday season to be a massive upgrade session for Apple iPhones. In turn, that could surprise investors who have soured on the stock during Apple's light-upgrade cycle, this year.
Plus: Asking yourself if Apple did enough with its second-tier product lines at a major event is always a must before buying or selling the stock. The new, pricier, Apple TV could be a sleeper product this holiday season, as the nation continues to cut cords.
I believe Microsoft (MSFT) and Sony were put on notice: Apple TV's video game download prowess, and using remote serving as a controller, could dent sales of the Xbox One and Playstation 4 this season, and in 2016. On the iPad Pro, just the fact Apple has a new tablet in the market targeted for a new user is a positive -- the tablet market has been absolutely dreadful for the past two years. By its sheer existence, the iPad Pro should help lift sentiment a little on Apple, as analysts have almost forgot its tablet business.
At the end of the day, here is a final question to ask yourself in the decision-making process: Are Apple's competitors, such as Google (GOOGL), Microsoft and Samsung, in the market this holiday season with a product or two that could take a bite out of Apple's leadership? From my viewpoint, the answer is no.