Apple (NASDAQ:AAPL) headed into its fiscal 2021 very first quarter with expectations which are higher 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 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 still must wait around indefinitely to get an iPhone twelve Pro
It has been over 2 weeks since Apple introduced the iPhone 12 Pro, and clients buying nowadays still have to wait as many as three days for shipping and delivery. That should be forever in the age of next-day delivery. By comparison, it took just six months for iPhone 11 interest to reach equilibrium with supply last year, according to Credit Suisse analyst Matthew Cabral. The Apple iPhone 12 Pro observed from an angle.
The regular iPhone 12 and also the iPhone 12 Mini are much more being sold both in-store and for immediate shipping. That suggests Apple must see a higher 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 greatly outperforming. And viewing iPhone accounts for fifty % of revenue, and usually closer to 60 % in the first quarter, that must have a meaningful influence on the revenue of its 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 business, which trades as Hon Hai Precision, reported sales of 713.8 billion New Taiwan dollars (about $25.5 billion) for December, and quarterly revenue of NT$two trillion. The 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 business is the premium supplier of the high end products.
Meanwhile, Dialog Semiconductor raised the fourth quarter revenue outlook 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 the revenue of its, it is a very good bet those potato chips are actually going in iPhone 12s.
And in 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 files 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 and New Year’s Eve, iOS computer users spent $1.8 billion in the App Store. That’s up 27 % from previous year, and an acceleration from the sixteen % growth in sales in the exact same period in 2019. The company also recorded $540 million in sales on New Year’s Day, up about forty % from previous year. Those numbers indicate a great deal of new iPhones underneath the tree this year.
What’s more, it bodes very well for Apple’s all important services segment — its highest-margin and fastest-growing enterprise. The App Store is Apple’s most profitable service, generating yucky profits well above the subscription services of its as 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 keep the majority 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] ahead of consensus at $14.78 [billion].” It’s very likely, nonetheless, that stronger App Store sales are a good indication of more potent sales of Apple’s other services.
It looks as the iPhone supercycle could be a reality this season based on the early results we’ve noticed along with other hints at need which is intense. And that’ll bolster Apple’s whole company — and the FAANG stock — when it reports the full results of its on Jan. twenty seven.