June 28, 2022

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 very first 5G smartphone. Investors anticipated robust 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 3 of the most noteworthy advancements bolstering Apple’s stock heading into its earnings report later this month.

1. You still must wait indefinitely to get an iPhone 12 Pro
It’s been more than two months since Apple introduced the iPhone twelve Pro, and customers purchasing today still have to hold back a maximum of three months for shipping and delivery. That may as well be forever in the age of next day shipping. By comparison, it took just six months for iPhone eleven interest to attain equilibrium with supply last year, according to Credit Suisse analyst Matthew Cabral. The Apple iPhone 12 Pro seen from an angle.

The standard iPhone 12 and the iPhone 12 Mini are a lot more found both in-store and for instantaneous delivery. Which suggests 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 twelve in the earliest half of 2021. Combined with other things suggesting strong iPhone sales for the quarter, the taller ASP should lead to iPhone revenue greatly outperforming. And viewing iPhone accounts for fifty % of revenue, and typically closer to sixty % in the first quarter, that should have a meaningful impact on the revenue of its versus expectations.

2. Suppliers are publishing huge profits 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 (about $25.5 billion) for December, and quarterly revenue of NT$2 trillion. The beat expectations of NT$1.8 trillion, based on Bloomberg.

Foxconn’s outperformance is in addition in line with the greater-than-expected demand for the iPhone twelve Pro. The company is the exclusive supplier of the high end devices.

Meanwhile, Dialog Semiconductor raised the fourth quarter revenue outlook of its 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 demand for 5G chips as the primary reason. Considering Apple accounts for the vast majority of its revenue, it is a very good bet those chips are going in iPhone 12s.

And also in late December, Wedbush analyst Daniel Ives said his Asia supply chain checks “have today exceeded actually our’ bull case scenario'” in a note to investors.

3. New files in the App Store
Apple reported record gross sales for its App Store in the annual brand new year of its update. In the week in between Christmas Eve and New Year’s Eve, iOS users spent $1.8 billion in the App Store. That’s up 27 % from last year, plus an acceleration from the sixteen % growth of sales of the same period in 2019. The company even recorded $540 million in sales on New Year’s Day, up about 40 % from previous year. Those numbers indicate a lot of new iPhones under the tree this season.

Additionally, 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 profits well above the membership services of its as Apple Music or maybe Apple TV. So outperformance on that front must cause better-than-expected earnings.

Morgan Stanley analyst Katy Huberty notes, “If we keep the majority 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’s most likely, nevertheless, that more potent App Store sales make the perfect indication of stronger sales of Apple’s other services.

It looks as the iPhone supercycle could be a reality this season depending on the early results we have seen as well as other hints at need which is intense. And that’ll bolster Apple’s whole business — and the FAANG stock — if this reports the complete results of its on Jan. twenty seven.