Stock pick Apple gets dinged after iPad event on sell on the news reaction

10/22/2013 5:25 pm EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

Apple’s big product launch, featuring a new iPad and a new iPad Mini, ended at about 2:30 p.m New York time today, October 22.

The shares were down 1.3% at that time. The market didn’t hear anything major that it hadn’t expected and so investors sold the shares on the news. Apple had climbed in the run up to today’s event.

As expected, Apple announced a new slimmed down, speeded up iPad, the iPad Air with a 9.7 inch Retina display and with a 64-bit A7 processor. The iPad Air is 20% thinner and 28% lighter (just one pound) than the last generation iPad. The iPad Air will go on sale on November 1 and for the first time it will go on sale in China on the launch date.

As expected, Apple announced a new iPad Mini (with the A7 processor) that is 4 times faster and with 8 times faster graphics. The Mini, as expected, will feature an upgraded 5-megapixel camera. As unexpected/sort-of-expected, the new Mini will come with Apple’s Retina display just like the iPad Air and the iPhone. (Some pre-event rumors had Apple delaying a Retina screen on the Mini due to supply constraints.)

As expected, Apple announced an updated MacBook Pro with Retina display, longer battery life (2 hours more than the last model), faster flash storage, and Intel’s (INTC) newest Xeon processor with up to 12 cores.

On the software side, Apple announced a few things that are, I think, unexpected in terms of pricing. Every new Mac will come with updated versions of iWork and iLife—for free. Apple also announced, as expected, that its new operating system update Mavericks OS X is available for download today—for free. (Pre-event the consensus seemed to be that Apple would sell Mavericks for $20.)

Last year’s iPad Mini will sell for $299 and the iPad 2, launched in 2011, will sell for $399.

I think that today’s event and products are important for Apple—the company needed to get an iPad and iPad Mini refresh to market in time to catch the holiday shopping season. But there was nothing big today that was unexpected. No big new product. So the market’s sell on the news reaction is just what we might have expected even if the product launch portends very solid earnings for the December quarter

Apple is a member of my Jubak’s Picks portfolio http://jubakpicks.com/

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , I liquidated all my individual stock holdings and put the money into the fund. The fund did own shares of Apple as of the end of June. For a complete list of the fund’s holdings as of the end of June see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/

 

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