Apple (NASDAQ:AAPL) headed into its fiscal 2021 first quarter with expectations that are higher 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 strong sales as wireless carriers push their 5G networks and build excitement around the new iPhones. All signs indicate 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’ll still have to wait around indefinitely to get an iPhone twelve Pro
It has been approximately two weeks since Apple introduced the iPhone 12 Pro, and clients buying today still need to hold back up to three weeks for shipping. That should be for decades in the era of next day delivery. By comparison, it took only 6 months for iPhone eleven demand to achieve equilibrium with supply last year, based on Credit Suisse analyst Matthew Cabral. The Apple iPhone 12 Pro seen from an angle.
The normal iPhone twelve as well as the iPhone twelve Mini are much more found both in store and for instantaneous delivery. That suggests Apple should 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 first half of 2021. Coupled with other factors suggesting strong iPhone sales for the quarter, the taller ASP should lead to iPhone revenue greatly outperforming. And viewing iPhone accounts for 50 % of revenue, and usually closer to 60 % in the first quarter, which need to have a significant influence on the revenue of its versus expectations.
2. Suppliers are publishing big revenue 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 (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 also in line with the greater-than-expected demand for the iPhone twelve Pro. The company is the premium supplier of the high-end products.
Meanwhile, Dialog Semiconductor raised its fourth quarter revenue perspective from a range of $380 million to $430 million to between $436 million and $441 million, Barron’s reports. The chipmaker cited increased need for 5G chips as the main reason. Considering Apple accounts for the vast majority of the revenue of its, it is a pretty great bet those potato chips are actually going in iPhone 12s.
And for late December, Wedbush analyst Daniel Ives said his Asia source chain checks “have now exceeded even 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 along with New Year’s Eve, iOS computer users spent $1.8 billion in the App Store. That’s up twenty seven % from year which is previous, as well as an acceleration from the 16 % growth in sales in the exact same period in 2019. The company even recorded $540 million in sales on New Year’s Day, up nearly forty % from year which is last. Those numbers indicate a great deal of new iPhones under the tree this season.
Additionally, it bodes well for Apple’s all-important services segment — its fastest-growing and highest-margin business. The App Store is Apple’s most profitable service, generating gross earnings well above the subscription services of its like Apple Music or Apple TV. So outperformance on that front should result in better-than-expected earnings.
Morgan Stanley analyst Katy Huberty notes, “If we maintain the rest of our December quarter Apple Services forecast unchanged, the most recent App Store data would imply December quarter Services revenue of $14.84 [billion]… forty [basis points] in front of consensus at $14.78 [billion].” It is quite possible, nevertheless, 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 year depending on the first results we’ve seen and other hints at intense need. And that’ll bolster Apple’s entire business — and also the FAANG stock — if this reports its complete results on Jan. twenty seven.