Apple shares fell, rose, then fell again overnight and this morning as the company launched the new iPhones, the new iWatch and a mobile payments system which seems to have been the big attention grabber.
But the buzz around the company’s launch day could not stop Apple shares and the wider market falling on the day.
Apple shares traded as low as $US96.14, as high as $US103.08 and ended the day on $US97.99, 0.4% lower than Monday’s close.
And Wall Street closed with the Dow down 0.6%, Nasdaq off 0.8% and the S&P 500 was off 0.6% and under the 2,000 level, finishing on 1,998.
Gold rose $US2, oil rose 10 cents a barrel and the Aussie dollar is poised to slip under the 92 US level as what seems to be an emerging sell off develops.
It was Wall Street’s biggest drop in five weeks.
But it was Apple’s new product launch which dominated the day.
From all the reports, the two new iPhones with larger screens (4.7 inch and 5.5 inch) were as predicted, although they still have a low res. camera of 8 megapixels, compared to newer models from rivals with camera sensors of up to 41 megapixels.
The new phones will be available in the US and eight other countries (including Australia) on September 19, and 115 countries by end of the year.
A new version of the mobile operating system, iOS 8, will be available for free on September 17.
The new Apple iWatch looks like being a hit, it will work with iPhones from the 5 series onwards, not the 4’s and lower. It will sell for $US349 in the US, but international pricing hasn’t been revealed.
It goes on sale in the US in early 2015.
It is the company’s first new product after the iPad (which is losing momentum and could be refreshed later this year to work with the iWatch and the new payments system).
The Apple Watch will track heart rate through sensors on the reverse side, for health monitoring, and will vibrate when it receives notifications from a tethered iPhone, such as messages or calendar reminders.
Wearers can respond to messages using text, Siri voice control or a selection of emoticons. And it tells the time.
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But its the new payments system called Apple Pay (which will be in all new iPhones and the new Apple Watch) which grabbed the attention of investors.
It will have as major partners, Citigroup, Amex, Visa and Mastercard, Bank of America and Well Fargo.
That spread of banks and credit card companies gives the new system a huge head start.
eBay’s Pay Pal looks like being the existing service in danger if Apple Wallet takes off.
Even though Apple’s international share of the smartphone market is falling, it still dominates the huge US market with a 42% share.
That makes the Apple Pay system the defacto mobile payments system and one other phone companies will have to match or buy.
The new service will be available in the United States in October, and will only work on iPhone 6 models, so it will take time to hit critical mass as Apple customers upgrade and new users make the switch.
Of course after the recent iCloud hack, the pressure will be on Apple to make the payments system as hack proof as possible.
The new payments system will be based on the credit card details already being held by the company in iTunes – so there are up to 800 million individual accounts – 15 months ago it had 575 million, so its popularity is increasing.
Each transaction will have a unique identifying number, and will use a dynamic security code. A credit or debit card number won’t be stored on the phone.
For extra security, the iPhone will use a fingerprint scan, and cashiers won’t see a customer’s name, credit card number or security code.
And users will not be limited to using Apple Pay for store purchases.
They will also be able to use the new technology for Internet and app-based purchases, which will broaden its appeal considerably.
The Financial Times carried a nice report on the impact of the new products on some of Apples biggest suppliers, such as Foxconn (also known as Hon Hai Precision), the huge Taiwanese manufacturing group, LG and Samsun of South Korea, US chip and technology groups, Qualcomm, Broadcom, Advanced Micro Devices and Skyworks Solutions. The FT also listed Apple’s Top 200 suppliers here.
