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 brand 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 still need to wait forever to get an iPhone 12 Pro
It’s been approximately two months since Apple introduced the iPhone twelve Pro, and clients purchasing today still have to wait up to 3 days for shipping and delivery. That might as well be for years in the age of next-day delivery. By comparison, it took just six weeks for iPhone eleven need to reach equilibrium with supply last year, based on Credit Suisse analyst Matthew Cabral. The Apple iPhone twelve Pro observed from an angle.
The regular iPhone 12 and also the iPhone twelve Mini are much more found both in store and for instant delivery. That suggests Apple must see a better average selling price (ASP) for the iPhone when it announces the first-quarter results of its.
Apple is reportedly ramping up production for the iPhone twelve in the very first half of 2021. Coupled with other factors suggesting very strong iPhone sales for the quarter, the higher ASP should lead to iPhone revenue significantly outperforming. And viewing iPhone accounts for fifty % of revenue, and typically closer to sixty % in the earliest quarter, which must have a meaningful influence on its revenue versus expectations.
2. Suppliers are posting big profits 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, based on Bloomberg.
Foxconn’s outperformance is also in line with the greater-than-expected demand for the iPhone 12 Pro. The company is the exclusive 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 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 its revenue, it is a pretty great bet those potato chips are actually going in iPhone 12s.
And also for late December, Wedbush analyst Daniel Ives said his Asia source chain checks “have now exceeded actually 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 its annual new year update. In the week in between Christmas Eve along with New Year’s Eve, iOS users spent $1.8 billion in the App Store. That is up 27 % from year which is last, and an acceleration from the 16 % growth of sales of the same period of 2019. The company also recorded $540 million in sales on New Year’s Day, up nearly forty % from previous year. Those numbers indicate a great deal of new iPhones under the tree this year.
Additionally, it bodes very well for Apple’s all important services segment — its highest-margin and fastest-growing enterprise. The App Store is actually Apple’s most lucrative service, generating yucky profits well above the membership services of its like Apple Music or Apple TV. So outperformance on that front must 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] in advance of consensus at $14.78 [billion].” It’s very likely, nevertheless, that more potent App Store sales are a good indication of more potent sales of Apple’s other services.
It looks as the iPhone supercycle might be a reality this season depending on the first results we’ve noticed and other hints at demand that is strong . And that’ll bolster Apple’s entire business — as well as the FAANG stock — in the event it reports the complete results of its on Jan. twenty seven.