Apple (NASDAQ:AAPL) headed into its fiscal 2021 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 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 3 of the most noteworthy advancements bolstering Apple’s stock heading into its earnings report later this month.
1. You’ll still need to wait around forever to get an iPhone 12 Pro
It’s been more than two weeks since Apple released the iPhone 12 Pro, and customers purchasing today still need to wait up to three weeks for shipping and delivery. Which may as well be forever in the era of next-day shipping. By comparison, it took just six days for iPhone 11 need to attain equilibrium with supply last year, according to Credit Suisse analyst Matthew Cabral. The Apple iPhone 12 Pro seen from an angle.
The normal iPhone 12 as well as the iPhone 12 Mini are much more being sold both in-store and for immediate shipping. That hints Apple better 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 earliest half of 2021. Coupled with other things suggesting very strong iPhone sales for the quarter, the higher ASP should lead to iPhone revenue greatly outperforming. And viewing iPhone accounts for fifty % of revenue, and usually closer to 60 % in the very first quarter, that should have a significant 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 (about $25.5 billion) for December, and quarterly revenue of NT$two 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 need for the iPhone 12 Pro. The company is the premium 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 requirement for 5G chips as the reason. Considering Apple accounts for the vast majority of its revenue, it’s a pretty great bet those chips are actually going in iPhone 12s.
And also for late December, Wedbush analyst Daniel Ives said his Asia supply chain checks “have now exceeded actually our’ bull case scenario'” in a note to investors.
3. New records in the App Store
Apple reported record gross sales for the App Store of its in its annual new year update. In the week between Christmas Eve along with 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, plus an acceleration from the sixteen % growth of sales in the exact same time of 2019. The company even recorded $540 million in sales on New Year’s Day, up about forty % from previous year. Those numbers suggest a good deal of new iPhones underneath the tree this year.
Additionally, it bodes very well for Apple’s all-important services segment — its highest-margin and fastest-growing business. The App Store is Apple’s most profitable service, generating yucky profits well above its membership services as Apple Music or Apple TV. So outperformance on that front must cause better-than-expected earnings.
Morgan Stanley analyst Katy Huberty notes, “If we maintain the rest of our December quarter Apple Services forecast unchanged, the latest App Store data would imply December quarter Services revenue of $14.84 [billion]… 40 [basis points] in front of consensus at $14.78 [billion].” It’s very likely, nevertheless, that more potent App Store sales make the perfect indication of more potent sales of Apple’s other services.
It looks like the iPhone supercycle might be a reality this year based on the first results we’ve noticed as well as other hints at need which is intense. And that’ll bolster Apple’s entire company — and the FAANG stock — in the event it reports its full results on Jan. twenty seven.