Apple (NASDAQ:AAPL) headed into its fiscal 2021 first quarter with high expectations from investors. The highlight of Apple’s quarter was the launch of the iPhone 12, the tech titan’s 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 will still need to wait indefinitely to get an iPhone twelve Pro
It’s been approximately two weeks since Apple introduced the iPhone 12 Pro, and customers buying nowadays still have to hold back as many as three months for delivery. That might as well be for years in the era of next day delivery. By comparison, it took just 6 days for iPhone 11 need to attain equilibrium with supply last year, according to Credit Suisse analyst Matthew Cabral. The Apple iPhone 12 Pro noticed from an angle.
The standard iPhone twelve and also the iPhone twelve Mini are much more found both in store and for immediate shipping. That implies Apple better see a higher average selling price (ASP) for the iPhone when it announces the first-quarter results of its.
Apple is reportedly ramping up production for the iPhone 12 in the very first half of 2021. Coupled with other things suggesting very strong iPhone sales for the quarter, the higher ASP should lead to iPhone revenue significantly outperforming. And considering iPhone accounts for fifty % of revenue, and usually closer to sixty % in the earliest quarter, that should have a meaningful impact on its revenue versus expectations.
2. Suppliers are posting 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$2 trillion. The beat expectations of NT$1.8 trillion, according to Bloomberg.
Foxconn’s outperformance is additionally in line with the greater-than-expected need for the iPhone twelve Pro. The company 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 need for 5G chips as the primary reason. Considering Apple accounts for the majority of the revenue of its, it is a really good bet those chips are actually going in iPhone 12s.
And also for 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 records 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 16 % growth of sales of the exact same time of 2019. The company also recorded $540 million in sales on New Year’s Day, up about 40 % from year that is previous. Those numbers suggest a lot of new iPhones under 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 profits well above the membership services of its as Apple Music or 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 front of consensus at $14.78 [billion].” It is most likely, nevertheless, that stronger App Store sales are a good indication of stronger sales of Apple’s other services.
It looks like the iPhone supercycle might be a reality this year based on the early results we’ve spotted and other hints at need which is intense. And that’ll bolster Apple’s whole business — and also the FAANG stock — when it reports its complete results on Jan. 27.