The Importance Of iPhone X: Apple Has Moved The Entire Market Before

Sky-high expectations for Apple Inc. AAPL may mean a short-term drop after the company unveils its new product offerings Tuesday, says long-time Apple analyst Gene Munster.

At center stage is the tenth anniversary edition of the influential iPhone, which is rumored to contain augmented reality and 3D technology. The iPhone represents nearly 70 percent of sales by the company, which is nearly 4 percent of the S&P 500, so a significant drop in Apple shares could conceivably affect the market as a whole.

"We're probably expecting more like ... a 7 or 8 percent drop" in Apple, Munster, co-founder of Loup Ventures, said on CNBC Monday. Apple’s new product launch is expected at 1 p.m. ET.

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"Fast forward to a few weeks from now — there's going to be some wringing of hands as people start to think about what the March and June quarters of next year look like," Munster said.

An unreleased build of iOS 11 was leaked to the press over the weekend. Munster said one leak caused him to believe the stock wouldn't fall as much as he originally predicted: "The idea of an LTE watch."

"The watch is 3 percent of Apple's business today, and if they allowed it to be untethered to the phone ... it creates a bigger opportunity. We think it will essentially double the size of that business," Munster said.

Regarding Apple's anticipated high-end iPhone, Munster said, "I believe this phone will deliver on a much higher growth rate for the iPhone."

Apple Has Moved Market Before

Apple, the biggest single component of the S&P 500, took the Dow down a bit in April when shares fell 1.6 percent after QUALCOMM, Inc. QCOM filed a countersuit against the iPhone maker, claiming Apple covered up how iPhone 7s equipped with its chips outperformed those with Intel Corporation INTC chips.

In May, Apple was up 19 percent year to date. The Dow Jones Industrial Average leared 21,000 about the same time, with Apple seen as a major driver of those gains.

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