Impact of Apple’s New iPhone Product Introduction on Apple’s Abnormal Returns in the Smartphone Industry

Abstract

Research purpose: Apple Inc. is the leading technological firm that regularly announces new product launches to the public. The study focuses on the impact of new iPhone launch events on Apple’s stock abnormal return opportunities.

Research design: For the study, data on Apple's new iPhone launch were collected from Apple’s official website, and data on Apple Inc.'s price, market, and risk-free rates were obtained from various reliable sources. The data on daily prices cover January 2006 to March 2026, and the iPhone introduction data cover January 2007 to March 2026. The study calculates abnormal returns (AR) and cumulative abnormal returns (CAR) around the introduction of the new iPhone model. Stata 19 was used to obtain event-study results using regression and statistical tests.

Findings: The study found a positive abnormal return on a short window, but the amount is too small to capture. However, the CAR is negative after the announcement date, consistent with the “buy the rumor, sell the news” effect. The results suggest that the stock often declines slightly relative to the broader market on the day of the announcement, likely because market expectations are already reflected in the stock price, inferring the events are predictable, which is consistent with semi-strong market efficiency. Additionally, this analysis reveals volatility in abnormal returns across short and long windows, as well as a subsequent recovery period that adjusts to market event information.

Research value and implications: Predictable events do not create value for shareholders because the market perceives such information as routine. The new product launch event affects Apple's stock price, but the market reacts based on its expectations. New information does not always signal positive market sentiment, given prevailing market conditions.

Contribution: The distinction between routine events and surprise events of the Apple iPhone launch and its different effects on the abnormal return in the capital market.

Limitations: For this event study of Apple stock returns, the selected window may miss investors' delayed reactions to new product launch information for technological products.