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 very first 5G smartphone. Investors anticipated excellent sales as wireless carriers force 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 on this month.
1. You’ll still need to wait around indefinitely to get an iPhone 12 Pro
It has been above 2 weeks since Apple introduced the iPhone twelve Pro, and customers buying nowadays still have to wait as many as three days for delivery. Which should be for years in the age of next day shipping. By comparison, it took just 6 weeks for iPhone 11 need to reach equilibrium with supply last year, based on Credit Suisse analyst Matthew Cabral. The Apple iPhone 12 Pro noticed from an angle.
The standard iPhone twelve and the iPhone twelve Mini are a lot more readily available both in store and for immediate delivery. That implies Apple must see a higher average selling price (ASP) for the iPhone when it announces its first quarter benefits.
Apple is reportedly ramping up production for the iPhone twelve in the very first half of 2021. Combined with other things suggesting very strong iPhone sales for the quarter, the higher ASP should lead to iPhone revenue greatly outperforming. And considering iPhone accounts for fifty % of revenue, and generally closer to sixty % in the first quarter, that should have a meaningful influence on its revenue versus expectations.
2. Suppliers are posting big 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$2 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 business is the exclusive 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 as well as $441 million, Barron’s reports. The chipmaker cited increased requirement for 5G chips as the primary reason. Considering Apple accounts for the vast majority of its revenue, it’s a pretty good bet those chips are actually going in iPhone 12s.
And in late December, Wedbush analyst Daniel Ives said his Asia source chain checks “have today exceeded actually our’ bull case scenario'” in a note to investors.
3. New files in the App Store
Apple reported record gross sales for the App Store of its in its annual brand new year update. In the week between Christmas Eve and 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, as well as an acceleration from the 16 % growth in sales of the same time of 2019. The company also recorded $540 million in sales on New Year’s Day, up almost forty % from year which is previous. Those numbers indicate a great deal of new iPhones underneath the tree this season.
In addition, it bodes well for Apple’s all important services segment — its fastest-growing and highest-margin business. The App Store is Apple’s most lucrative service, generating gross earnings well above the subscription services of its like Apple Music or perhaps Apple TV. So outperformance on that front should lead to better-than-expected earnings.
Morgan Stanley analyst Katy Huberty notes, “If we keep 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 advance of consensus at $14.78 [billion].” It’s most likely, however, that more potent App Store sales are a great indication of more potent sales of Apple’s other services.
It looks as the iPhone supercycle might be a reality this year based on the early results we’ve seen along with other hints at strong need. And that’ll bolster Apple’s entire business — as well as the FAANG stock — when it reports the full results of its on Jan. twenty seven.