Apple Stock Falls

According to Panos Mourdoukoutas’ article, the Apple consumer has grown accustomed to getting the most innovative and revolutionary technology, but has been recently disillusioned by the iPad Mini.  In this last quarter, Apple has recycled an old product, rather than producing new, ground-shaking technology.  Investors have reason to be worried, especially because “after a major product release”, Apple’s stock usually soars.  This new product release was a major contributing factor to the company’s stock drop, but perhaps not the most significant.

http://ewallstreeter.com/market-buzz/1352388079

In actuality, the most prominent influence on Apple’s stock decline was the disappointing iPhone 5 sales.  In a video interview, Scott Sutherland claimed to have estimated that “over the opening weekend”, iPhone 5 sales would reach 8 million, but sales fell short at just over 5 million.  In class, Murray Carlson taught us that a stock fluctuates according to not only how well it performs, but also how it measures up to expectations.  This principle is clearly present in this instance because even though sales did not decrease from the iPhone 4S sales, the stock price dropped because of the weight of the missed estimates.  This case showed how crucial it is for a company to meet analysts’ estimates.