It's been called "Nerd Nirvana." Every year since 1983, Apple has held its Worldwide Developers Conference (WWDC) as a way to display its new hardware, software and technologies for developers. It was here that Steve Jobs first unveiled the critically successful and consumer-loved iPod and iPhone devices, which changed both the music and telecommunications industries.

However, despite all the industry-changing product announcements, Apple's investors continue to be unimpressed with the WWDC format. Like clockwork, the company's stock falls every Monday as the showcase begins and various software and other technological advances are revealed.

So what gives? Why is the consumer and tech world excited about Apple's upcoming product launches and Wall Street is not? It could be a case of too many hyped rumors.

A Decade-Long Pattern
Marking nearly a decade in length, Apple's stock has constantly closed below where it closed on the Friday before the WWDC kicks off. In 2003, Apple stock dropped seven cents after the WWDC. Likewise, in 2004, shares fell 61 cents. Every year the technology superstar's shares fall in a consistent pattern by the end of the conference.

With WWDC 2012 recently wrapping up, Apple stock's pattern of rising then falling during the keynote product launch remains intact. Apple's shares, which closed just above $580 on the Friday before the WWDC, peaked at $588 around noon, before steadily dropping throughout the rest of the trading session. Just after Apple's new CEO, Tim Cook, finished the keynote speech and the new major product announcements, shares of the firm fell quickly and closed at $571.17 - nearly 1.58% lower than the previous day's close.

SEE: Good For Facebook, Bad For Google And Apple

So Why the Drop?
With the "Apple Indicator" firmly unbroken, it's pretty clear that the company can't seem to please or meet investor expectations. The real question is why? The purpose of the conference isn't to support Apple's stock price, but to display its new products. This year's WWDC featured some impressive advances, including Apple's new Retina monitor, the world's highest-resolution display, as well as updates to Siri and new lighter weight MacBook designs.

Yet, Wall Street seemed unimpressed and sent the stock down. Perhaps it's a continued case of overpromising and under-delivering? Apple is one of the most widely written about companies on the planet, especially when you factor in the firm's high level of secrecy concerning its new products. To that end, speculation dominates when it comes to the WWDC and new hardware/software launches.

This year, rumors about the possible unveiling of the iPhone 5 as well as a 7-inch iPad tablet dominated headlines. Some analysts even postulated that key Apple designer Jony Ive would unveil a 46-inch Apple-powered television set. Therefore, when Apple didn't produce these items and displayed its new "Mountain Lion" operating system instead, it's easy to understand why investors were unmoved. CNBC analyst Bob Pisani, perhaps summed up Wall Street's position the best when he said that many traders thought that Apple's WWDC presentation was fairly underwhelming and "a relative non-event."

SEE: 6 Must-Have Features For The iPhone5

There lies the biggest issue, when it comes to the WWDC. Tech blogger and institutional investor expectations are always raised too high due to the hundreds of false and ambiguous rumors created by the media.

Over the long term, the company has continually impressed and created completely new categories of must-own devices. However, for a few days every summer, it disappoints, as these rumors prove false.

The Bottom Line
For the last 23 years, Apple's Worldwide Developers Conference has served as the company's main new product showcase. However, despite the firm's long-term performance, shares of the company have fallen every year for the last decade at the close of the event. The reason - too much hype surrounding the product announcements. For investors, the best advice could be to wait until after the conference to buy shares.

Related Articles
  1. Economics

    Understanding Switching Costs

    Consumers incur switching costs when they receive a monetary or other type of penalty for changing a supplier, brand or product.
  2. Investing

    What’s Holding Back the U.S. Consumer

    Even as job growth has surged and gasoline prices have plunged, U.S. consumers are proving slow to respond and repair their overextended balance sheets.
  3. Forex Education

    China's Devaluation of the Yuan

    Just over one week ago the People’s Bank of China (PBOC) surprised markets with three consecutive devaluations of the yuan, knocking over 3% off its value.
  4. Economics

    Explaining Market Penetration

    Market penetration is the measure of how much a good or service is being used within a total potential market.
  5. Economics

    Calculating the Marginal Rate of Substitution

    The marginal rate of substitution determines how much of one good a consumer will give up to obtain extra units of another good.
  6. Stock Analysis

    Is the Apple Watch a Real Threat to Fitbit?

    Examine the potential for marketplace competition between Fitbit and the Apple Watch in the rapidly growing consumer wearables industry.
  7. Investing News

    How 'Honesty' Could Pay off for Jessica Alba

    Is it possible that Jessica Alba is one of the savviest businesswomen on the planet?
  8. Professionals

    How Does Tim Cook's Management Style Differ from Steve Jobs?

    Understand the differences between Tim Cook and Steve Jobs. Learn if the perceived differences makes Cook a good or bad leader and CEO.
  9. Stock Analysis

    3 Stocks to Protect Your Portfolio from Inflation

    Discover three stocks to protect portfolios against inflation. The best companies to protect against inflation are those with pricing power.
  10. Chart Advisor

    Invest In Consumer Staples With This ETF

    The consumer staples sector is showing signs of strength in a weak market. We'll take a look at a couple ways to make a trade.
RELATED TERMS
  1. Duty Free

    Goods that international travelers can purchase without paying ...
  2. Fast-Moving Consumer Goods (FMCG)

    These are consumer goods products that sell quickly at relatively ...
  3. Obamanomics

    A buzzword used to describe the economic philosophies of United ...
  4. Draghi Effect

    The calming effect of European Central Bank President, Mario ...
  5. Buffett Rule

    A tax rule proposed in 2011, by President Barack Obama, stating ...
  6. Shovel-Ready

    A term widely used by President Barack Obama to describe a construction ...
RELATED FAQS
  1. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
  2. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
  3. What role does the OEM (original equipment manufacturer) play in the finished product?

    Original equipment manufacturers (OEMs) do not typically play much of direct role in determining the finished product. However, ... Read Full Answer >>
  4. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
  5. Is the retail sector also affected by seasonal factors?

    Generally speaking, the retail sector is highly seasonal. Almost invariably, sales in the retail sector are highest in the ... Read Full Answer >>
  6. What has the retail sector evolved to its current structure?

    Retail is the catch-all phrase for the sale of final goods to consumers; a retail transaction is considered an "end" and ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!