Markets Not Won Over by iPad Hype

By David Parkinson

After all the hype and breathless anticipation, Apple Inc.'s (AAPL) secret is out - the iPad has made its public debut. And investors saw a great, big "sell" button on it.

Within minutes of Apple CEO Steve Jobs unveiling the new tablet device at a media conference in San Francisco, Apple's stock had shed more than $5 (U.S.) - or about 2.5% - to just above $200 a share on the Nasdaq Stock Market.

In fairness, it would have been hard for the announcement not to disappoint the market, given the perverse level of hype-bordering-on-hysteria that surrounded the iPad leading up to its unveiling. You would have thought the Beatles were about to land at JFK, and Neil Armstrong was about to step on the moon - at the same time.

"Apple Inc. chief executive officer Steve Jobs arrived at a product introduction event in San Francisco. Jobs, wearing a black top and jeans, entered through the back door of the Yerba Buena Center for the Arts in San Francisco," enthused usually straight-laced business news service Bloomberg about 45 minutes before the announcement, turning all TMZ on us in the absence of any actual news to that point.

"Apple CEO Steve Jobs has taken the stage," the Associated Press reported just seconds before Mr. Jobs let the world in on his secret - presumably a cue for us all to hold our breath.

Unfortunately, not long after he started talking, the markets came to the fairly natural conclusion that we weren't hearing much that we didn't already suspect from the series of (many suspected well-orchestrated) public leaks in advance of the announcement. Indeed, Apple's stock had already risen 4% in the two days before iPad's unveiling.

With the hype and the initial reaction out of the way, now we'll wait to see if analysts believe the iPad will be a hit that will fundamentally lift Apple's earnings potential to a whole new level, a New-Coke-esque marketing gaffe that will set it back, or somewhere in between. It may take a while - certainly days in terms of analysts' forecasts, and probably months in terms of public enthusiasm for the product - before the true impact of the iPad on the stock can be assessed.