As for being a one off earnings event, no I disagree. Apple was already poised to do well this year due to strong planning, product design and diversified market price points.
The iPhone SE had been in the planning stages for over a year as part of Apple’s strategy to take on the Value smartphone segment and address the needs of value conscious and smaller format iPhone users and iOS interested buyers. The same will be said for the 5.4” iPhone 12 aimed at the same crowd who has higher hardware desires. The SE was always always planned for an early 2020 launch, precedent being the original iPhone SE in 2016 March. Apple uses the March-April date to not compete with its own flagships, and effectively steal Samsung and Android’s thunder from their 1st quarter launches. In fact, I’m certain the iPhone SE has already outsold the woeful sales of the entire Samsung Galaxy S20 lines combined.
Apple has told everyone they were diversifying their hardware, software, and services, and counting iPhone unit sales and revenue was not a reflection of how well other areas of the company was doing. With the revenue numbers by product or services segments, and improvements in every geographic market, one can see Apple planning, execution, and most importantly, consumer demand for Apple’s ecosystem.
To give you a preview on how this is going to continue to increase, take these tidbits. Huawei currently has 55% or so of the Chinese 5G market and about 65% of the total Chinese smartphone, but they lag internationally, especially in the US. Apple in this last quarter improved their China numbers 32% YOY to 7.4M units (compared to Huawei’s 36.6M unit’s) despite Covid impact and following China’s reopening. They did this with the SE, iPhone 11 series, and only 4G LTE iPhones. When Apple introduces their 5G iPhones, guess what will happen? Chinese Apple users will snap up 5G iPhones to be first movers and to address pent up demand waiting for 5G iPhones. If they sell over 10-12M iPhones in China in the Oct-Dec. holiday quarter and follow up with sales into 2021 Lunar New Year, especially if there are good reviews, that would take significant market share from Huawei and increase Apple’s share by 40-55%. It can happen.
The other development to watch for is Apple establishing manufacturing in India to avoid heavy import taxes and levies. It is positioning itself to tap India’s burgeoning middle class with now lower and competitively priced iPhone SE, XR, iPhone 11, and likely iPhone 12 models. When India is managing or recovers from its pandemic, it’s pent up iPhone (and subsequent other hardware, App, and services) demand will add to Apple’s overall results. Rinse and repeat for the US and Europe.
Do you now see how Cook and Apple are playing the long game, building their device and market portfolios, managing their own silicon CPU’s and chips, designing, writing and developing tight software integration to make it work seamlessly? And executing product manufacturing and marketing and support that is the envy of the industry?
Apple will hit split adjusted $125-130 by end of year if not sooner and $200 could come in 2021 if not by the announcement of fiscal Q1 2021 earnings in Jan 28 or Feb. 2, 2021.
The iPhone SE had been in the planning stages for over a year as part of Apple’s strategy to take on the Value smartphone segment and address the needs of value conscious and smaller format iPhone users and iOS interested buyers. The same will be said for the 5.4” iPhone 12 aimed at the same crowd who has higher hardware desires. The SE was always always planned for an early 2020 launch, precedent being the original iPhone SE in 2016 March. Apple uses the March-April date to not compete with its own flagships, and effectively steal Samsung and Android’s thunder from their 1st quarter launches. In fact, I’m certain the iPhone SE has already outsold the woeful sales of the entire Samsung Galaxy S20 lines combined.
Apple has told everyone they were diversifying their hardware, software, and services, and counting iPhone unit sales and revenue was not a reflection of how well other areas of the company was doing. With the revenue numbers by product or services segments, and improvements in every geographic market, one can see Apple planning, execution, and most importantly, consumer demand for Apple’s ecosystem.
To give you a preview on how this is going to continue to increase, take these tidbits. Huawei currently has 55% or so of the Chinese 5G market and about 65% of the total Chinese smartphone, but they lag internationally, especially in the US. Apple in this last quarter improved their China numbers 32% YOY to 7.4M units (compared to Huawei’s 36.6M unit’s) despite Covid impact and following China’s reopening. They did this with the SE, iPhone 11 series, and only 4G LTE iPhones. When Apple introduces their 5G iPhones, guess what will happen? Chinese Apple users will snap up 5G iPhones to be first movers and to address pent up demand waiting for 5G iPhones. If they sell over 10-12M iPhones in China in the Oct-Dec. holiday quarter and follow up with sales into 2021 Lunar New Year, especially if there are good reviews, that would take significant market share from Huawei and increase Apple’s share by 40-55%. It can happen.
The other development to watch for is Apple establishing manufacturing in India to avoid heavy import taxes and levies. It is positioning itself to tap India’s burgeoning middle class with now lower and competitively priced iPhone SE, XR, iPhone 11, and likely iPhone 12 models. When India is managing or recovers from its pandemic, it’s pent up iPhone (and subsequent other hardware, App, and services) demand will add to Apple’s overall results. Rinse and repeat for the US and Europe.
Do you now see how Cook and Apple are playing the long game, building their device and market portfolios, managing their own silicon CPU’s and chips, designing, writing and developing tight software integration to make it work seamlessly? And executing product manufacturing and marketing and support that is the envy of the industry?
Apple will hit split adjusted $125-130 by end of year if not sooner and $200 could come in 2021 if not by the announcement of fiscal Q1 2021 earnings in Jan 28 or Feb. 2, 2021.
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