After Apple's presentation, problems arose for two competitors and the company itself

Fall of Apple shares

On September 8, Apple announced a traditional event - the presentation of new products

companies.Apple usually announces new iPhones in September, but this year there were rumors that the release of the phones was being delayed. The event's slogan, “Time Flies,” directly hinted that the focus would be on the Apple Watch.

Actually, that’s what happened, and we didn’t see any new iPhone models at the presentation. 

What is the reason for the delays?

Apple stated at the time of presentationlatest financial report that it will not ship new phones in September and that it plans to release new iPhones later this year. “Last year, we started shipping new iPhones at the end of September, and this year we expect shipments to be several weeks later,” Apple CFO Luca Maestri explained on a call with investors.

Maestri did not say why this year's deliveriesiPhones are being delayed or limited, but rumors of an iPhone delay have been circulating for months. Earlier this year, the Wall Street Journal reported that Apple had delayed mass production of its upcoming iPhone phones by about a month. Qualcomm also hinted at a delay in the release of the iPhone earlier this week.

Apple usually presents its annualiPhone update in September and begins shipping devices before the end of the month. It is unclear if the devices will be ready before October, but until recently, Apple users hoped the company could still unveil its new phones during the September event. And that's why.

What were the fans waiting for?

All the most reliable sources of Apple's rumors were unanimous: instead of announcing three new iPhone models, as Apple did in 2017, 2018 and 2019, the company will present four:

  • a new 5.4-inch model with a smaller screen than the 5.8-inch iPhone 11 Pro (and presumably a much smaller phone);
  • the younger 6.1-inch model - the same screen size as the iPhone 11, with the same specifications as its 5.4-inch sibling;
  • second 6.1-inch high-end specification model;
  • a new 6.7-inch model that will have a larger screen than the 6.5-inch iPhone 11 Pro Max (and will likely be larger too).

The initially plausible rumor came fromApple analyst Ming-Chi Kuo, who has been reliably predicting the sizes and specs of new iPhones for several years, but The Wall Street Journal also confirmed these screen sizes in April, and last week Bloomberg reported such data as fact.

Effects

During its highly anticipated presentation on September 15, Apple (NASDAQ: AAPL) shares fell more than 6%, causing trouble for the tech titan. 

At the beginning of the presentation at 20:00 Moscow time, the share price was $ 118.14, but then the price gradually began to decline and reached a daily low by 21:34 Moscow time - $ 115.06 per share. Now the shares are trying to win back the fall - the price fluctuates around $ 115.25 per share.

After market capitalization Applesoared to an impressive $2.3 trillion as a result of strong third-quarter results and subsequent stock splits, Apple lost about $350 billion in total market value. This is a huge number - it exceeds the market capitalization of approximately 98% of other companies in the S&P 500.

What angered investors was that they did notsaw clear reasons for the decline. However, Apple shares, like many other companies, have plummeted over the past few days - the market has pulled back sharply from recent highs. However, it is possible that the drop in stocks is due to the lack of new iPhones at the presentation, given how high the expectations of users were.

What awaits Apple after the fall?

Volatility is the price that shouldpay investors if they want to create long-term wealth in the stock market. In the short term, stocks can rise and fall for reasons that are difficult to understand. But in the long run - a period that should be measured in years, not weeks or months - the value of a stock is ultimately determined by the fundamental value of its underlying business.

In this regard, Apple's future remains bright. The 5G-based iPhone upgrade looks set to spike sales of the company's devices and services (and thus its revenue and cash flow) in the coming years. As its price falls along with most of the rest of the stock market, long-term investors may want to use this opportunity to buy Apple stock at a discount.

Conflict with Spotify

Spotify is an online audio streaming service,allowing you to legally and for free listen to music, audiobooks and podcasts without downloading them to your device. Available as a website, applications for all operating systems, smartphones, smart devices and car media systems. Only recently became available in Russia, but in the USA it is considered the number 1 music service.

Spotify vs Apple One

Spotify shares fell about 7% this week after Apple announced its all-in-one subscription package, Apple One, which includes itself and the Apple Music service.

Apple One is a single subscription that unitesApple Music, Apple TV+, Apple Arcade, iCloud and other services. According to the company, Apple One is the easiest way to subscribe to Apple services, including Apple Music, Apple TV+, Apple Arcade, Apple News+, Apple Fitness+ and iCloud. The services included in the selected tariff plan can be used on all your favorite Apple devices: iPhone, iPad, iPod touch and Apple TV. A single subscription will be available in more than 100 countries.

Spotify has 138 million paying users, according to the Swedish company for the second quarter, significantly higher than its competitors Apple Music and Amazon Music.

Public accusations Spotify

However, Spotify publicly criticized Apple forcreation of a subscription, reports Apple Insider. After this, the popular music service Spotify accused Apple of anti-competitive behavior and using its dominant position in the market for profit. Spotify believes that Apple is being dishonest in encouraging users to prefer its products.

Once again, Apple uses its dominantposition and unfair practices to disadvantage competitors and deprive consumers of favoring their own services. We call on antitrust authorities to take urgent action to curb Apple's anti-competitive behavior, which, if left unchecked, will cause irreparable harm to the developer community and threaten our collective freedom to listen, learn, create and communicate.

Spotify Public Statement

How did Apple respond?

Let us remind you that within Apple One users canget immediate access to all Apple services, including music. Obviously, this is exactly what Spotify considered anti-competitive behavior. However, Apple denied the accusations, saying that users can still “discover and enjoy alternatives.” 

Apple responded to Spotify's announcement in a statement to Reuters reporter Stephen Nellis.

Clients can discoveralternatives to each of Apple's services and use them. We're introducing Apple One because it provides great value to customers and is an easy way to access Apple's full range of subscription services. We'll recommend the Apple One plan that will save you the most money, based on the subscriptions you already have. It is ideal for those who love our services and want to get more for less, and is especially suitable for families. Also, some services included with Apple One are available for use on third-party devices, and you can cancel them at any time.

Apple Statement

Adil Zaman, Partner of the Wall Street Alliance Group,noted, "Apple is trying to create a kind of ecosystem, like what Amazon Prime did, where they become a one-stop shop, and of course because of this, competitors like Spotify do face some risk."

Spotify also offers collaborative deals withthe Hulu television network and ViacomCBS Showtime. The firm's chief financial officer, Paul Vogel, said at the Goldman Sachs conference on Wednesday that Spotify foresaw these moves.

Will there be a trial?

Despite high-profile accusations of monopolization,Spotify's claim is unlikely to be upheld in court as Apple is also offering packages and discounts to its competitors. Most recently, Apple released the Showtime and CBS All Access Discount Package for $ 9.99 for all Apple TV + subscribers.

Spotify itself is no stranger to creating its own bundles: It comes bundled with Hulu, AT&T Cellular, and some Samsung phones.

Suppressing Peloton

At its event on Wednesday, Apple fired a warning shot at the booming home fitness industry by announcing its Fitness + product.

In fact, this is a subscription service built forApple devices. Users watch fitness videos and follow on their preferred Apple screen. An additional effect is achieved by synchronizing the workout with the Apple Watch that the user is wearing.

This is a strong move from Apple, especially given the presence of the cheaper Apple SE in the market, and competing fitness content creators are right to worry.

What does Fitness + offer?

It's easiest to think of it as a streaming service, but full of fitness videos. This includes sports such as cycling, rowing, yoga, strength training, and more.

The user has a number of levels available fromfrom beginner to advanced and a recommendation system that works as soon as you start training. When it comes to syncing with Apple Watch, Fitness+ will display your health stats during your workout. 

Why now?

Creating and presenting Fitness + is a very smart moveby Apple. The pandemic has caused many more people to start exercising from home. Many people have opted out of gym subscriptions and have watched fitness videos on YouTube. Many people look for some kind of structure during home workouts.

Implications for Peloton

Before the Fitness+ presentationfrom Apple Peloton has been a leader in the home workout industry. Peloton allows users to participate remotely in classes that are streamed from the company's fitness studio. The company is known for its at-home cycling workouts, but has expanded into more regular fitness classes. A standalone subscription to Fitness+ costs $9.99 per month or $79.99 per year. Apple Watch buyers will receive three months of free use of the service. A Peloton subscription costs $12.99.

Of course Fitness+ is going to take its basesports users who may have used Peloton. The stock market realized this quite quickly—Peloton shares fell 5% after news of the launch of Apple Fitness+.

It goes without saying that Apple is quicklywill surpass Peloton in size and user base. And yes, the corporation is going to take away a large share of the market from Peloton. However, Peloton may have a chance to survive.

By making its way into the home workout content market with Fitness +, Apple is automatically shedding light on the business already doing it. And Peloton will benefit the most from this.

There will always be people who hate Applejust because it's Apple. They may like the ideas of the company and look for alternatives. And at this moment users will pay attention to Peloton, because now it is on the crest of the information wave. In the end, with Fitness +, Apple is validating the entire home streaming workout industry. He suddenly drew the attention of millions of people to his capabilities.

Yes, entering the market will reduce the potentialthe number of users Peloton can have, but will undoubtedly increase the number of users served by the service. In other words, Peloton will get less market share but more subscribers.

What's the bottom line?

Apple's presentation didn't go as smoothly as it didinvestors and competitors expected. In the end, everyone suffered. Time will tell whether Apple will be able not to lose its capitalization and investors, and whether its competitors will be able to recover from the new products of the technology giant.

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