Apple Inc. did what it hinted it was going to do: It unveiled a new iPad on Wednesday with a sharper screen, upgraded camera and a better processor – and investors shrugged. During the unveiling, Apple shares were essentially flat. Soon after, they declined 0.7 per cent, even as the broader market rose.
Perhaps the indifference should be expected. After all, this event was widely telegraphed by Apple and tech-savvy observers have since been going over everything that one could reasonably expect in a new iPad. If the new iPad was a wrapped Christmas gift, then over-eager kids had already picked it up, shaken it, unwrapped the box's corners and put it through an X-ray machine. No mystery means no surprise, and no surprise means little in the way of share price movement.
As well, investors might still be hypersensitive to product names. Remember the anticipation last year that greeted the unveiling of the iPhone 5 – only for markets to sell off on the news that the latest smartphone would actually be called the iPhone 4s? Well, the news is that the new iPad will not be called the iPad 3, at least not officially; it's just a new iPad. Shrugs.
Here's one other thought: New tech products are all very nice for consumers, put perhaps the stock market is less impressed with gadgets and more driven by market share and profit margins – neither of which tends to be showcased in Apple launches. Oh sure, the company's chief executive, Tim Cook, walked people through the enormous success of the iPad since its launch and the warm embrace from developers.
But Apple's share price largely reflects other matters – whether the company can maintain its robust profit margins and market share, and whether it can compete against cheaper tablet computer offerings from the likes of Amazon.com Inc. and Research In Motion Ltd.
Meanwhile, the joke about whether people should be buying an iPad or an Apple share – the two being roughly equivalent in price right now – seems to have an answer, at least on Wednesday: The iPad.