Apple Inc. (NASDAQ:AAPL) stock had an active day Tuesday, rallying on the back of the iPhone 6 unveiling and then ending with a slight loss. Some probable reasons for the slight downward trend could be investor concerns and profit taking toward the end of the day.
Did the Apple Watch lead the decline?
On Tuesday, CEO Tim Cook unveiled the iPhone 6 and iPhone 6 Plus, the two most-anticipated phones of the year. They carried shares higher, suggesting that investors are content with the new smartphones’ features, as well as the prices.
Shares took another shot upward after rising by around 4% after the Apple CEO talked about the company’s entry into the mobile payment market. However, the stock could not hold the same level and slipped after Tim Cook and other Apple executives took more than the expected amount of time to reveal the pricing of the new Apple Watch. The broader market was also trading downward, creating a sizable doubt about whether Apple stock is leading the pack or just following the broader market trend.
The Apple Watch starts out at $349 and can perform a multitude of functions ranging from GPS to heart monitoring. There’s also a user interface that some would say is the best innovation on the software design front in several years. Despite being an innovative piece, demand for the smartwatch is debatable, as the device carries almost the same price tag as a high-end smartphone.
Is the Apple Watch a risk?
The Cupertino, Calif.-based company has impressed the market and fans with the iPhone 6, and its payment business is looking like a good strategy on the financial front. However, the Apple Watch is the company’s way of showing its flair with new technology and a new product category.
The new gadget from the company definitely packs significant risk with it, however, and investors usually don’t react well to new risk.Dan Morgan, a senior portfolio manager at the Synovus Trust Company and a loyal Apple investor, said that there is confusion about whether Apple is following the right strategy with this watch.
“It looks like an add-on product, not something that has the potential to be a phenomenon,” he said.