Last week and this week, Apple, Inc. has been in the news. Last week, Apple (NASDAQ: AAPL) announced some new products for release this year. This week, a stunning revelation concerning the FBI's iPhone backdoor controversy was publicized. The news has impacted Apple's stock performance.At the company's March 21 event in Cupertino, CA, Apple unveiled plans for a new iPhone and iPad that are smaller than their immediate predecessors. The new iPhone is called the iPhone SE, and it is like an iPhone 6s only with the size of the iPhone 5s. The iPhone SE uses a 4-inch Retina display screen. It boasts an A9 chip, perhaps the fastest, best processor in the world right now. It also has a powerful M9 motion coprocessor, which enables fitness tracking abilities and touchless Siri. It has a 12 megapixel iSight camera that takes 4K videos and Live Photos. It is made of bead-blasted aluminum and designed to be light and comfortable at under 4 ounces. Its price starts at $399, and it will be available on March 31. The new iPad is a smaller iPad Pro at 9.7 inches of display. It has the same features of the 12.7-inch iPad Pro from last year, including a 64-bit A9X chip. Apple claims its screen is the brightest and least reflective ever. The new iPad starts at $599 and will be available on March 31. Finally, Apple released iOS 9.3, an update with new features and privacy protections, an Apple TV update with better organization, and new health data apps.
Yesterday, news arrived of a stunning new development in the Apple versus the FBI case. According to the Washington Post's "FBI has accessed San Bernardino shooter's phone without Apple's help," the US Justice Department dropped its attempt to force Apple to write a new unencrypted operating system. Apparently the FBI had found a way to access the data in the San Bernardino attacker's iPhone without Apple's help. In a twist of irony, the Justice Department will decide whether to share its information with Apple, who will surely want to know how the FBI managed to unlock the iPhone. What are the implications of the revelation? First, there has been no precedent set to compel tech companies to aid the federal government, which is a positive for civil libertarians and the industry. Second, Apple has much work to do if it wants to remain the creator of the world's most secure phone. Of course, in the near future, there might be a similar controversial case, perhaps with an actual resolution.
The recent events have affected Apple's stock. After falling to and being stuck above the $92 range from the beginning of the year, Apple's stock price has finally found an uptrend. It broke above $100 earlier this month, and today it has risen from around $105 to around $107. Yes, the US total stock market has gone up. But part of the reason is that Apple is reinforcing its brand as the right choice for security and privacy-conscious consumers. And its loyal customers have long wanted a smaller new iPhone; Apple has listened.
The author holds a long position in AAPL.