How Apple's Stock Reacts to New Product Announcements

Later today, Apple is expected to finally announce the long-rumoured iWatch. It will be the first time since Steve Jobs unveiled the first iPad in January 2010 that Apple will break into a new product category. Next to the immense amount of media coverage Apple's product presentation receive, they also create attention on the stock market where investors try to make a buck out of the hype surrounding Apple's products.

But does it pay off to buy Apple stock prior to the company's product announcements? Our analysis of past events says: in three out of four times it does. We had a look at Apple's stock performance following the announcements of the first iMac, iPod, iPhone and iPad and in most cases the company's stock price soared in the 12 months after the respective presentations. After the first iPhone had been unveiled in early 2007 Apple's stock price went on a tear and almost doubled within 12 months. The same could be observed after the debuts of the first iMacs and iPads, when the stock price climbed 47% and 65% within the following 12 months, respectively.

The unveiling of the original iPod in 2001 marks the only exception. It took some time for the iconic MP3 player to unfold its true potential and Apple's stock dropped almost 20% in the year after its first appearance.