FTC: We use income earning auto affiliate links. Check out 9to5Mac on YouTube for more Apple news:. Breaking news from Cupertino. He joined 9to5Mac to share even more tech news around the world. We think the semiconductor shortage is only likely to have a transitory impact on Apple, and believe that the company should see further upside from its iPhone franchise, with upgraded models around the corner and also from its fast-growing and highly lucrative services business.
Apple also appears to be getting more Android customers to migrate to its ecosystem, noting that it saw strong double-digit growth in the number of people who switched in Q3. This is significantly positive, as Apple has done a good job locking in users and better monetizing them with pricier upgrades, new products, and services.
Our revenue estimates are slightly below consensus while our EPS estimate is in line with consensus. Revenues should see a nice bump year-over-year, driven by strong sales of the iPhone 12, higher demand for iPads and Macs as the remote learning and working trend persists, and continued growth in the services segment.
However, Apple typically sees a seasonal decline in sales in Q3 and the company has noted that the drop this quarter could be a bit steeper, due to supply chain-related issues and the slightly delayed launch of the flagship iPhones. The underperformance comes as investors rotated out of pandemic winners such as tech stocks, to more cyclical and value stocks to play the re-opening.
Apple, which trades at almost 30x forward earnings, which is above historical levels, has been impacted to a certain extent. That said, if Apple manages to post a solid earnings beat in Q3, we could see the stock gain further. For example, Apple says that it has about million paid subscriptions on its platform now, marking an increase of million compared to last year.
Separately, Apple said that it also benefited from a favorable foreign exchange environment. The company has guided margins of between Moreover, Apple expects to see some semiconductor supply constraints for its Macs and iPads over the next quarter, likely putting some pressure on margins. Think Apple stock is pricey at current levels, but still want to play the upside in iPhone sales?
Check out our theme on Apple Component Supplier Stocks — which includes a diverse set of companies that supply components for iPhones, iPads, and other Apple devices. Our revenue estimates are roughly in line with consensus while our EPS estimate is marginally below consensus.
Revenues should see a nice bump year-over-year driven by the higher-priced iPhone 12 handsets — which will see their first full quarter of availability.
Still, Apple says that its December quarter will be the company's largest in terms of revenue in its history. Apple CFO Luca Maestri said in a call with analysts that iPad sales would decline year-over-year in the December quarter due to supply constraints while other product categories would grow.
The Covid related manufacturing disruptions have improved greatly. The chip shortages linger on," Cook said. Cook said that the supply issues were with chips on "legacy nodes," or older chips, instead of the technologically advanced processors at the heart of Apple's devices. Credit Suisse names a raft of U. The expectation of year-over-year sales growth suggests that Apple sees significantly more demand for its new iPhone 13 models than it can supply.
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