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 very first 5G smartphone. Investors anticipated robust 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 on this month.
1. You’ll still have to wait indefinitely to get an iPhone twelve Pro
It has been approximately two months since Apple released the iPhone 12 Pro, and customers purchasing today still need to wait a maximum of three days for delivery. That may as well be forever in the era of next-day delivery. By comparison, it took just six months for iPhone 11 interest to reach equilibrium with supply last year, based on Credit Suisse analyst Matthew Cabral. The Apple iPhone twelve Pro observed from an angle.
The standard iPhone twelve as well as the iPhone 12 Mini are much more being sold both in-store and for instant delivery. That hints Apple should see a better average selling price (ASP) for the iPhone when it announces its first-quarter benefits.
Apple is reportedly ramping up production for the iPhone 12 in the earliest half of 2021. Coupled with other things suggesting strong iPhone sales for the quarter, the taller ASP should lead to iPhone revenue significantly outperforming. And considering iPhone accounts for fifty % of revenue, and generally closer to 60 % in the very first quarter, that should 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 company, which trades as Hon Hai Precision, reported sales of 713.8 billion New Taiwan dollars (aproximatelly $25.5 billion) for December, and quarterly revenue of NT$two trillion. The 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 business is the exclusive supplier of the high-end devices.
Meanwhile, Dialog Semiconductor raised its fourth quarter revenue outlook 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 is a pretty good bet those chips are 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 documents in the App Store
Apple reported record gross sales for the App Store of its in its annual new year update. In the week in between Christmas Eve and New Year’s Eve, iOS users spent $1.8 billion in the App Store. That is up twenty seven % from previous year, plus an acceleration from the sixteen % growth of sales in the same period 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 under the tree this year.
It also bodes very well for Apple’s all important services segment — its fastest-growing and highest-margin business. The App Store is actually Apple’s most profitable service, generating yucky earnings well above the subscription services of its as Apple Music or maybe 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 latest App Store data would imply December quarter Services revenue of $14.84 [billion]… forty [basis points] ahead of consensus at $14.78 [billion].” It is very likely, however, 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 early results we’ve noticed and other hints at need that is intense . And that’ll bolster Apple’s entire business — and the FAANG stock — in the event it reports the complete results of its on Jan. 27.