iPhone 5 Release Date: Apple and Sprint Stocks Vulnerable After iPhone 4S Disappointment
Disappointment surrounding yesterday’s iPhone 5 fake-out caused Apple stocks to slide by 5.2 percent as of Tuesday afternoon, but recovered by the end of the day to just a 0.6 percent drop.
The drop began yesterday afternoon at 1.7 percent, almost immediately after new Apple CEO Tim Cook announced the iPhone 4S, instead of the highly anticipated iPhone 5, at the Apple press conference “Let’s Talk iPhone” in Cupertino, California.
“It’s been 16 months and all you’ve got is an A5 processor in the existing iPhone 4,” BGC partners’ analyst Colin Gillis argued.
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Analysts concur that this is a temporary drop, and stocks will soon rise once again.
“It’s a mild disappointment, but they’re still going to be selling millions of units,” Gillis added.
Sprint, expected to be the new, and possibly exclusive, carrier for the iPhone 5, also experienced a stock drop of 10 percent with heavy selling prior to the press conference.
Forbes magazine argues that Sprint, already vulnerable as the third telecommunications company behind AT&T and Verizon, could potentially crash due to its massive Apple purchase.
Sprint is reportedly paying $20 billion to provide several years’ worth of iPhones. The company is predicted to buy 30.5 million iPhones in the next 4 years.
This is a wise move on the Apple side, because Sprint’s budget plans will lure in more users from more demographics.
Sprint bonds are currently at their lowest level since May 2009. The expensive deal it has made with Apple proves risky, and depending on sales, this product could make or break Sprint as a company.
Apple’s competitor, the Google Inc. Android phone, also experienced a minor stock drop of 1 percent at $371.32. Google will unveil its new Android Ice Cream Sandwich in mid-October.
“Fandroids,” the nicknamed tech rivals of Apple’s iPhone, await the Ice Cream Sandwich with expectation, and analysts question which competing tech company, Google or Apple, will come out on top.
Although Apple's press conference failed to unveil the new iPhone 5, it did discuss an array of other Apple promises, such as free downloads with the iCloud and new applications for the iPhone 4S.
