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 strong 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 this month.
1. You’ll still need to wait indefinitely to get an iPhone twelve Pro
It has been over two months since Apple released the iPhone 12 Pro, and customers purchasing today still have to hold back up to 3 weeks for shipping and delivery. That may as well be for years in the era of next-day shipping. By comparison, it took just 6 days for iPhone 11 need to achieve equilibrium with supply last year, according to Credit Suisse analyst Matthew Cabral. The Apple iPhone twelve Pro observed from an angle.
The standard iPhone 12 as well as the iPhone 12 Mini are much more being sold both in store and for instant shipping. That implies Apple better see a higher 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 first half of 2021. Coupled with other factors 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 usually 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 $25.5 billion) for December, and quarterly revenue of NT$two trillion. The beat expectations of NT$1.8 trillion, as reported by Bloomberg.
Foxconn’s outperformance is additionally in line with the greater-than-expected demand for the iPhone 12 Pro. The company is the premium supplier of the high-end devices.
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 majority of its revenue, it’s a really good bet those chips are going in iPhone 12s.
And for late December, Wedbush analyst Daniel Ives said his Asia supply chain checks “have today 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 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 is up 27 % from year that is last, as well as an acceleration from the sixteen % growth of sales of the same period of 2019. The company also recorded $540 million in sales on New Year’s Day, up nearly forty % from year that is last. Those numbers suggest a good deal of new iPhones under the tree this year.
Furthermore, it bodes very well for Apple’s all-important services segment — its highest-margin and fastest-growing enterprise. The App Store is actually Apple’s most profitable service, generating yucky earnings well above its membership services like Apple Music or Apple TV. So outperformance on that front must lead to better-than-expected earnings.
Morgan Stanley analyst Katy Huberty notes, “If we keep the majority of our December quarter Apple Services forecast unchanged, the most recent App Store data would imply December quarter Services revenue of $14.84 [billion]… 40 [basis points] in advance of consensus at $14.78 [billion].” It’s quite possible, nonetheless, that more potent 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 depending on the first results we’ve spotted and other hints at need that is intense . And that’ll bolster Apple’s entire company — and also the FAANG stock — if this reports the full results of its on Jan. 27.