Apple (NASDAQ:AAPL) headed into its fiscal 2021 first quarter with higher expectations 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 force their 5G networks and build excitement around the 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 this month.
1. You still have to wait around forever to get an iPhone twelve Pro
It has been over 2 weeks since Apple released the iPhone twelve Pro, and clients buying today still have to wait a maximum of 3 days for shipping and delivery. Which should be for decades in the era of next-day shipping. By comparison, it took only six days for iPhone eleven need to achieve equilibrium with supply last year, according to Credit Suisse analyst Matthew Cabral. The Apple iPhone twelve Pro seen from an angle.
The normal iPhone 12 as well as the iPhone twelve Mini are a lot more being sold both in store and for instant shipping. That implies Apple must 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 strong iPhone sales for the quarter, the higher ASP should lead to iPhone revenue greatly outperforming. And considering iPhone accounts for 50 % of revenue, and typically closer to sixty % in the first quarter, that must have a significant influence on its revenue 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 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 additionally in line with the greater-than-expected demand for the iPhone twelve Pro. The business is the exclusive supplier of the high end products.
Meanwhile, Dialog Semiconductor raised its fourth-quarter revenue outlook 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 the revenue of its, it is a very good 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 brand 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 27 % from previous year, plus an acceleration from the sixteen % growth of sales of the exact same period in 2019. The company also recorded $540 million in sales on New Year’s Day, up almost forty % from last year. Those numbers indicate a great deal of new iPhones under the tree this year.
It also bodes well for Apple’s all-important services segment — its highest-margin and fastest-growing business. The App Store is actually Apple’s most profitable service, generating yucky earnings well above the membership services of its 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 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 most likely, nonetheless, that stronger App Store sales make the perfect indication of stronger sales of Apple’s other services.
It looks as the iPhone supercycle might be a reality this season depending on the early results we have spotted as well as other hints at intense demand. And that’ll bolster Apple’s whole company — and the FAANG stock — in the event it reports its complete results on Jan. 27.