What investors forget in Apple event frenzy: Analyst

Apple's real story? Innovation: Analyst

The market has put too much emphasis on Apple launches, casting a shadow over the real story, analyst Daniel Ernst said Thursday, a day after investors dissed the company's announcement of product updates.

That story is consistent and significant innovation, the buy side analyst told CNBC's "Squawk Box."

"While everyone always expects them to come up with something groundbreaking and new, my contention is Apple is still among the most innovative tech companies on the planet because they do something that I call economic innovation. And by that I mean they produce products and technologies out of innovation that generate real revenues and real profits," said the Welch Capital Partners analyst.

On Wednesday Apple unveiled updates to some of its most popular products, including faster, more powerful iPhones; a larger iPad geared toward professionals; and gaming and voice-activation features for Apple TV.

Read More Apple shares dip after iPhone, TV, iPad launch

The launch failed to excite investors, who sent the stock down about 2 percent in after hours trading. By Thursday afternoon, shares reversed those losses and were trading about 2 percent higher, at $112.60. (Click here for the latest price.)

Ernst cautioned that stock volatility and Apple product debuts go hand in hand.

"When Steve [Jobs] was here, it used to go down 10 percent because they'd always expect him to walk on water," he said. "[Tim] Cook has actually moderated the volatility in the stock."

Shares of Apple are trading at 12 times forward earnings with compound annual earnings growth of 31 percent, Ernst said. That compares with a price-to-earnings ratio of 16 and 7 percent growth for the , setting up a value opportunity for shares of Apple, he added.

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Still, S&P Capital IQ equity analyst Angelo Zino said the event was a net negative. While Apple continues to innovate and roll out great products, the market is not rewarding the company for its potential long-term opportunities.

"When you look at the expectations over the next 12 months relative to what Apple has rolling out there, we just don't think they're going to generate enough revenue to meet those expectations, and I think that's why you saw the selloff after the event yesterday afternoon," he told "Squawk on the Street."

S&P Capital IQ maintained its $150 12-month price target on shares of Apple, but has a hold on the stock because it expects near-term volatility.

Zino said Apple is stuck in "no man's land" when it comes to the iPad, and its shift toward enterprise with the iPad Pro is another sign that consumers do not want to pay for the high-end product.

He said he is is more excited about Apple TV but cautioned that it is not a needle driver because the segment makes up less than 1 percent of Apple's total revenue base. However, he said, it shows Apple is remaining relevant in the living room.

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Much of the attention on Wednesday focused on the iPhone, which accounts for three-quarters of Apple's revenue. In addition to improved performance, the iPhone 6S and iPhone 6S Plus will feature 3-D touch display, a more powerful camera, and 4K video capture.

These mid-cycle iPhone launches present a challenge, said Guy Kawasaki, former chief evangelist at Apple.

"Apple has to thread this needle where it provides enough upgrades and enough new features so that people with existing iPhones lust after it," he told "Squawk on the Street" on Thursday.

"On the other hand, if they announce something so great and they start conditioning people to expect this revolution every year, that's not sustainable."

DISCLOSURE: Neither the analysts nor their families own shares of Apple. Welch Capital Partners owns greater than a 1 percent share of the stock.