Apple (NASDAQ:AAPL) headed into its fiscal 2021 very 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 strong sales as wireless carriers force their 5G networks and build excitement around the 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 on this month.
1. You’ll still must wait around indefinitely to get an iPhone 12 Pro
It has been approximately 2 months since Apple introduced the iPhone 12 Pro, and customers purchasing nowadays still have to wait up to three weeks for delivery. That should be for decades in the age of next-day delivery. By comparison, it took only 6 days for iPhone eleven demand to attain equilibrium with supply last year, based on Credit Suisse analyst Matthew Cabral. The Apple iPhone twelve Pro noticed from an angle.
The normal iPhone 12 and also the iPhone twelve Mini are much more readily available both in store and for immediate shipping. Which suggests Apple better see an improved average selling price (ASP) for the iPhone when it announces its first-quarter results.
Apple is reportedly ramping up production for the iPhone twelve in the first half of 2021. Coupled with other factors suggesting very strong iPhone sales for the quarter, the taller ASP should lead to iPhone revenue greatly outperforming. And considering iPhone accounts for 50 % of revenue, and typically closer to 60 % in the very first quarter, that must have a meaningful impact on its revenue versus expectations.
2. Suppliers are publishing huge earnings numbers
Apple’s biggest iPhone assembler, Foxconn, announced record revenue for the month of December. The Taiwanese business, which trades as Hon Hai Precision, reported sales of 713.8 billion New Taiwan dollars (aproximatelly $25.5 billion) for December, and quarterly revenue of NT$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 twelve Pro. The company is the exclusive supplier of the high-end devices.
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 need for 5G chips as the main reason. Considering Apple accounts for the vast majority of its revenue, it is a really good bet those potato chips are going in iPhone 12s.
And also in late December, Wedbush analyst Daniel Ives said his Asia supply chain checks “have today exceeded actually our’ bull case scenario'” in a note to investors.
3. New documents in the App Store
Apple reported record gross sales for the App Store of its in the annual brand new year of its update. In the week in between Christmas Eve and New Year’s Eve, iOS computer users spent $1.8 billion in the App Store. That’s up 27 % from year which is last, plus an acceleration from the 16 % growth in sales of the exact same period of 2019. The company also recorded $540 million in sales on New Year’s Day, up about 40 % from last year. Those numbers suggest a good deal of new iPhones underneath the tree this year.
Additionally, it bodes well for Apple’s all important services segment — its fastest-growing and highest-margin enterprise. The App Store is actually Apple’s most profitable service, generating yucky profits well above its subscription services as Apple Music or maybe Apple TV. So outperformance on that front should result in better-than-expected earnings.
Morgan Stanley analyst Katy Huberty notes, “If we maintain the remainder of our December quarter Apple Services forecast unchanged, the new App Store data would imply December quarter Services revenue of $14.84 [billion]… forty [basis points] ahead of consensus at $14.78 [billion].” It’s most likely, nonetheless, that stronger App Store sales make the perfect indication of more potent sales of Apple’s other services.
It looks like the iPhone supercycle may be a reality this year based on the first results we have seen as well as other hints at demand which is intense. And that’ll bolster Apple’s whole company — as well as the FAANG stock — when it reports the complete results of its on Jan. twenty seven.