Investors seemed to be as underwhelmed as I was about the announcement; Apple stock went from $381 on Friday to a low of $355 yesterday. That's a pretty big 7% drop. Today the stock has almost regained all of that loss while bad reviews of the iPhone 4S continue to come in. Nobody is excited about this phone. So is the stock holding up?
1. By every measure the stock is still cheap. (The point I made over the weekend..)
2. Apple is continuing to sell the 3GS and 4. Want an iPhone but don't want to fork over hundreds of dollars? You can get a iPhone 3GS for free, FREE! with a new phone contract. If I were a cash-strapped Apple envy guy like I used to be, I would be taking that offer. In other words, Apple is now able to appeal to the snobs who want the latest and greatest and the common guy on the street. By increasing their pool of customers they will make more money.
3. The iPhone 4S will be sold on more networks. Namely, Sprint will now carry it in the US and they've added more companies across the planet. Again, more potential customers.
So I'm not recanting my weekend post of wishing I had money to buy Apple stock. Here they sell iPhones with no contract. That makes the price about $760. Right now that would get me two shares of Apple stock. That sounds like a better deal than iPhone 4S.
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