Apple (NASDAQ:AAPL) headed into its fiscal 2021 first quarter with higher expectations from investors. The highlight of Apple’s quarter was the launch of the iPhone twelve, the tech titan’s very first 5G smartphone. Investors anticipated robust sales as wireless carriers push their 5G networks and build excitement around the brand new iPhones. All signs indicate 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’ll still have to wait around indefinitely to get an iPhone twelve Pro
It’s been approximately 2 months since Apple released the iPhone twelve Pro, and clients purchasing today still have to wait a maximum of three days for shipping. That might as well be forever in the age of next day shipping. By comparison, it took only six days for iPhone eleven demand to reach equilibrium with supply last year, based on Credit Suisse analyst Matthew Cabral. The Apple iPhone 12 Pro noticed from an angle.
The normal iPhone twelve as well as the iPhone twelve Mini are much more being sold both in store and for immediate shipping. Which hints Apple should see a better average selling price (ASP) for the iPhone when it announces its first-quarter results.
Apple is reportedly ramping up production for the iPhone 12 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 significantly outperforming. And viewing iPhone accounts for 50 % of revenue, and generally closer to 60 % in the first quarter, that must have a meaningful influence on the revenue of its versus expectations.
2. Suppliers are publishing big 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 (about $25.5 billion) for December, and quarterly revenue of NT$2 trillion. That beat expectations of NT$1.8 trillion, as reported by Bloomberg.
Foxconn’s outperformance is in addition in line with the greater-than-expected demand for the iPhone twelve Pro. The company is the premium supplier of the high-end devices.
Meanwhile, Dialog Semiconductor raised the fourth-quarter revenue outlook of its from a range of $380 million to $430 million to between $436 million and $441 million, Barron’s reports. The chipmaker cited increased demand for 5G chips as the primary reason. Considering Apple accounts for the vast majority of the revenue of its, it’s a very great bet those chips are going in iPhone 12s.
And for 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 between Christmas Eve and New Year’s Eve, iOS users spent $1.8 billion in the App Store. That is up 27 % from previous year, and an acceleration from the sixteen % growth in sales in the exact same period of 2019. The company also recorded $540 million in sales on New Year’s Day, up almost forty % from year which is last. Those numbers suggest a great deal of new iPhones under the tree this year.
Furthermore, it bodes very well for Apple’s all-important services segment — its fastest-growing and highest-margin enterprise. The App Store is Apple’s most profitable service, generating yucky earnings well above its membership services like Apple Music or perhaps Apple TV. So outperformance on that front should cause better-than-expected earnings.
Morgan Stanley analyst Katy Huberty notes, “If we keep 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, however, that more potent App Store sales make the perfect indication of stronger sales of Apple’s other services.
It looks like the iPhone supercycle might be a reality this year based on the early results we’ve seen and other hints at demand which is intense. And that’ll bolster Apple’s entire business — as well as the FAANG stock — in the event it reports the full results of its on Jan. twenty seven.