Apple 2.0

Covering the business that Steve Jobs built

Apple fails to wow Wall Street

September 9, 2008: 3:25 PM ET

Steve Jobs may be the master of event marketing, but lately he seems to have lost his touch.

Case in point: The "Let's Rock" special event Tuesday to which the press and analysts were invited with great fanfare - advised in at least one case by Apple PR that this was a big one, worth flying across the country to see.

There were, to be sure, a couple new products and some new price points - a redesigned iPod nano starting at $149, a slightly thinner iPod touch starting at $229 - and a some new features that drew admiring applause.

The biggest crowd pleaser seemed to be the iPod nano's "shake to shuffle" feature, by which listeners can switch to a randomly chosen tune just by jiggling their iPod in the air. Jobs also got a warm reception for the new Genius features on iTunes, which puts songs together that go together and creates digital mix-tapes with a click.

"These are revolutionary products and revolutionary features," says Jupitermedia's Michael Gartenburg. "I think Apple has positioned itself well for the fourth quarter and the holiday season."

But Wall Street wasn't so impressed. Apple (AAPL) shares fell more than 7.5 points (4.7%) during the course of the event, from $159.64 at 1:06 p.m. to $152.12 at 1:56 p.m. [UPDATE: The stock closed at 151.68, down nearly 4% for the day.]

Part of the problem was that Jobs had few surprises up his sleeve. Spy photos of the new iPod nano had been widely circulated before the event, and the iPod touch's price cut was long overdue. Even details of the Genius feature had leaked in advance. Only "shake to shuffle" seem to catch the crowd unawares.

The event was an "overall negative" for the stock because the Street was hoping for more new products, wrote Piper Jaffray's Gene Munster in a report to clients posted an hour after the event.

But it may also be that Apple has gone to this well too often. Other companies are content to introduce new products with a press release and an ad campaign. Apple seems to feel it has to throw a whiz bang media extravaganza.

That may work when what's being unveiled is an iPhone. For yet another iPod? Not so much.

For a blow-by-blow account of the event, see the live blog here from Fortune's Jon Fortt.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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