Apple (NASDAQ:AAPL) headed into its fiscal 2021 very first quarter with high expectations from investors. The highlight of Apple’s quarter was the launch of the iPhone twelve, the tech titan’s first 5G smartphone. Investors anticipated robust sales as wireless carriers force their 5G networks and build excitement around the new iPhones. All signs indicate Apple’s delivered on those expectations.
Here are 3 of the most noteworthy advancements bolstering Apple’s stock heading into its earnings report later this month.
1. You’ll still have to wait indefinitely to get an iPhone twelve Pro
It has been above 2 months since Apple released the iPhone twelve Pro, and customers buying nowadays still have to hold back up to 3 weeks for delivery. That should be for years in the age of next-day delivery. By comparison, it took just six months for iPhone eleven interest to attain equilibrium with supply last year, as reported by Credit Suisse analyst Matthew Cabral. The Apple iPhone twelve Pro noticed from an angle.
The normal iPhone 12 as well as the iPhone twelve Mini are a lot more found both in store and for instantaneous shipping. Which hints Apple should see a higher average selling price (ASP) for the iPhone when it announces the first quarter benefits of its.
Apple is reportedly ramping up production for the iPhone twelve in the earliest half of 2021. Combined with other factors suggesting strong iPhone sales for the quarter, the higher ASP should lead to iPhone revenue significantly outperforming. And considering iPhone accounts for fifty % of revenue, and usually closer to 60 % in the very first quarter, which must have a meaningful influence on its revenue versus expectations.
2. Suppliers are posting huge revenue numbers
Apple’s biggest iPhone assembler, Foxconn, announced record revenue for the month of December. The Taiwanese company, which trades as Hon Hai Precision, reported sales of 713.8 billion New Taiwan dollars (aproximatelly $25.5 billion) for December, and quarterly revenue of NT$2 trillion. That beat expectations of NT$1.8 trillion, according to Bloomberg.
Foxconn’s outperformance is also in line with the greater-than-expected demand for the iPhone 12 Pro. The company is the premium supplier of the high end products.
Meanwhile, Dialog Semiconductor raised the fourth quarter revenue perspective of its from a range of $380 million to $430 million to between $436 million as well as $441 million, Barron’s reports. The chipmaker cited increased demand for 5G chips as the reason. Considering Apple accounts for the majority of its revenue, it’s a pretty great bet those chips are going in iPhone 12s.
And also in late December, Wedbush analyst Daniel Ives said his Asia supply chain checks “have today exceeded even our’ bull case scenario'” in a note to investors.
3. New documents in the App Store
Apple reported record gross sales for its App Store in the annual new year of its update. In the week between Christmas Eve and New Year’s Eve, iOS computer users spent $1.8 billion in the App Store. That is up 27 % from year that is last, as well as an acceleration from the sixteen % growth of sales of the same period of 2019. The company also recorded $540 million in sales on New Year’s Day, up about forty % from last year. Those numbers suggest a lot of new iPhones underneath the tree this season.
Additionally, it bodes well for Apple’s all-important services segment — its fastest-growing and highest-margin business. The App Store is Apple’s most profitable service, generating yucky profits well above its membership services like Apple Music or maybe Apple TV. So outperformance on that front must lead to better-than-expected earnings.
Morgan Stanley analyst Katy Huberty notes, “If we maintain the remainder of our December quarter Apple Services forecast unchanged, the most recent App Store data would imply December quarter Services revenue of $14.84 [billion]… 40 [basis points] in advance of consensus at $14.78 [billion].” It is quite possible, however, that more potent App Store sales are a great indication of stronger sales of Apple’s other services.
It looks like the iPhone supercycle could be a reality this year depending on the early results we’ve spotted as well as other hints at demand that is strong . And that’ll bolster Apple’s entire company — as well as the FAANG stock — when it reports the full results of its on Jan. twenty seven.