Apple Shares Fall as Keynote Event Fails to Excite Investors

Shares of Apple Inc.AAPL dropped nearly 2% in yesterday's trading session following the company's annual keynote event. Despite a slew of upgraded products, which include a new iPhone, investors were not impressed.

The primary reason behind their disappointment was the lack of any major surprises or any ground-breaking updates. The tech bellwether unveiled the new iPhone 6S and 6S Plus ,which looks similar to the existing iPhone 6 but comes with an upgraded camera and processor. The most important addition to iPhone 6S and 6S Plus is the multi-touch feature that includes 3D touch and force touch technology, which it seems is not quite enough to gain investors' confidence.

Additionally, as expected, Apple also launched the updated Apple TV with Siri, application updates for Apple Watch and the new iPad Pro that comes with a bigger screen and a stylus named Apple Pencil.

The beginning of the year had seen Apple gain steadily driven by strong demand for iPhone 6 and strength in the Chinese economy. However, the last few months have been tough, given the weakness in the global macroeconomic scenario and dwindling demand for iPhones. In the past three-month time frame, the tech giant has lost nearly 15%.

In fact, investors had pinned their hopes on the annual keynote event, expecting some radical launches that would put this Zacks Rank #3 (Hold) company back on the growth track. Expectations from Apple have always been high as the world's most valuable company has no dearth of resources (cash or skills) to develop more revolutionary offerings.

Also, the continued weakness in the Chinese economy (which constitutes nearly 25% of Apple's revenues) is a cause of investors' concern besides the absence of any major changes in the new iPhone.

However, in the past as well, Apple shares had not always responded well to iPhone launches but gained momentum gradually as demand picked up. We have to wait and see if the new products, especially the new iPhone replacement plan, enable Apple to gain market share amid increasing competition from big and small peers like Samsung Electronics Co. Ltd. SSNLF , Google GOOGL and Lenovo Group Limited LNVGY .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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