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Apple is expected to release tremendous results in the second quarter, with revenue of $ 76.6 billion, which will make it the standard narrative for the company.
Apple’s consensus in recent years is that the iPhone manufacturer is pushing for services and software because hardware sales are already saturated. For example, when customers typically hold a new iPhone for four years, compared to three years in 2018, Apple is forced to find new sources of growth.
In 2020, the results showed this: in the March quarter, iPhone sales fell by almost 7%, while iPad and Mac sales were at a standstill. The expected 17% increase in services – the unit that includes the App Store, warranties and licensing offerings – was significant and created a profit pace.
When Apple announces its March 2021 results on Wednesday, it is expected that services revenue will grow again by more than 17 percent to $ 15.7 billion, but better news for the company is expected in other businesses.
With a significant change, sales of iPhones, iPads, Macs and laptops (including Apple Watch and AirPods) are expected to work so well that services would be the slowest growing category in all of its departments.
“Apple is firing on all cylinders,” Morgan Stanley analyst Katy Huberty said.
Total revenue will rise by nearly a third to $ 76.6 billion, and net income will be between $ 47 percent and $ 16.6 billion, according to analysts estimates by Visible Alpha.
The results are pleasing compared to a year ago Chinese factories were closed the coronavirus did so at the end of the quarter and Apple decided to close retail stores around the world. However, Apple has never reported non-Christmas quarters with revenues of more than $ 65 billion, much less $ 76.6 billion.
The iPhone is wide it is expected to be a remarkable quarter, according to analysts, the 42 percent increase will be $ 41.2 billion, or 54% of the first line. The rapid growth is partly due to some Christmas and New Year quarterly sales It is pushing for 2021 after Apple delayed the first line of 5G-enabled devices due to supply chain restrictions.
A strong rebound in the Chinese market It’s likely to be a big task, as Huberty expects to send a record 11.1 million iPhones, nearly double what it was a year ago. Globally, the number of iPhones shipped is expected to rise by between 27 and 52 million, according to Visible Alpha.
The next fastest-growing category is expected to be the iPad, with analysts predicting a 27% growth of $ 5.6 billion. Mac sales are also expected to jump 22 percent to $ 6.5 million.
Both categories are seeing a high demand from the education sector as students from all over the world are calling for Zoom classes. Analysts at Goldman Sachs, which have a “sell” rating on Apple, predict more demand thanks to the iPad Pro recently announced in the June quarter, which is available in mid-May, but warns of a definite backlash.
“In any case, the high levels of demand for the iPad and Mac are unlikely to be sustainable as the world reopens,” they told customers in a note. “So another pace that is more driven by these areas may not be enough to drive more stocks.”
Morgan Stanley’s Huberty is much more confident and said that Apple has a “significant chance” that Mac will now rise from 7 percent to 15 percent of the global computer market (in line with the iPhone market share) by 2025.
Clothing is expected to grow by 21 percent to $ 7.6 billion. Such a pace is even more impressive, considering that the category grew by 54 percent a year ago.
Avil analyst Neil Cybart Above said the Apple Watch will sell nearly 40 million units this year, which is “roughly double the sales of the entire Swiss Watch industry.”
If these projections come out roughly, services will be the only category to grow by less than 20 percent in the last quarter, a striking feat for the $ 2.3 million company.
That’s not to rule out services – the category Apple has as its second largest revenue, and with more than a billion people using an iPhone, the set of software products may be sticky and consistent despite hardware sales in the coming years.
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