Apple (NASDAQ:AAPL) headed into its fiscal 2021 first quarter with expectations that are high from investors. The highlight of Apple’s quarter was the launch of the iPhone 12, the tech titan’s first 5G smartphone. Investors anticipated robust sales as wireless carriers push their 5G networks and build excitement around the brand new iPhones. All signs suggest Apple’s delivered on those expectations.
Here are three of the most noteworthy advancements bolstering Apple’s stock heading into its earnings report later this month.
1. You will still have to wait around indefinitely to get an iPhone twelve Pro
It has been approximately two months since Apple introduced the iPhone 12 Pro, and clients purchasing nowadays still have to hold back up to 3 days for delivery. That might as well be forever in the age of next-day shipping. By comparison, it took only 6 days for iPhone eleven demand to reach equilibrium with supply last year, based on Credit Suisse analyst Matthew Cabral. The Apple iPhone 12 Pro observed from an angle.
The normal iPhone 12 and also the iPhone twelve Mini are much more being sold both in store and for immediate shipping. Which implies Apple must 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 12 in the earliest half of 2021. Combined with other things suggesting strong iPhone sales for the quarter, the taller ASP should lead to iPhone revenue significantly outperforming. And considering iPhone accounts for fifty % of revenue, and typically closer to 60 % in the earliest quarter, which must have a significant influence on its revenue versus expectations.
2. Suppliers are publishing 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 (about $25.5 billion) for December, and quarterly revenue of NT$two trillion. That beat expectations of NT$1.8 trillion, according to Bloomberg.
Foxconn’s outperformance is also in line with the greater-than-expected need for the iPhone 12 Pro. The company is the exclusive supplier of the high-end products.
Meanwhile, Dialog Semiconductor raised its fourth-quarter revenue outlook from a range of $380 million to $430 million to between $436 million and $441 million, Barron’s reports. The chipmaker cited increased need for 5G chips as the main reason. Considering Apple accounts for the vast majority of the revenue of its, it’s a very great bet those potato chips are going in iPhone 12s.
And for late December, Wedbush analyst Daniel Ives said his Asia supply chain checks “have now exceeded even our’ bull case scenario'” in a note to investors.
3. New records in the App Store
Apple reported record gross sales for its App Store in the annual brand new year of its update. In the week in between Christmas Eve along with New Year’s Eve, iOS computer users spent $1.8 billion in the App Store. That is up twenty seven % from year that is previous, plus an acceleration from the sixteen % growth of sales of the same time in 2019. The company even recorded $540 million in sales on New Year’s Day, up almost 40 % from year which is previous. Those numbers indicate a lot of new iPhones under the tree this season.
It also bodes well for Apple’s all-important services segment — its highest-margin and fastest-growing business. The App Store is actually Apple’s most profitable service, generating yucky profits well above the membership services of its as Apple Music or maybe Apple TV. So outperformance on that front should cause better-than-expected earnings.
Morgan Stanley analyst Katy Huberty notes, “If we maintain the rest of our December quarter Apple Services forecast unchanged, the new App Store data would imply December quarter Services revenue of $14.84 [billion]… 40 [basis points] in front of consensus at $14.78 [billion].” It’s most likely, nevertheless, that more potent App Store sales make the perfect indication of stronger sales of Apple’s other services.
It looks as the iPhone supercycle could be a reality this year depending on the early results we have seen along with other hints at demand which is strong. And that’ll bolster Apple’s entire company — as well as the FAANG stock — if this reports the complete results of its on Jan. 27.