Category: AAPL

AAPL – 7 Things You Didn't Know About Apple

There’s a lot that most of us know about Apple (NASDAQ:AAPL). For example, it’s a very successful company, offering smartphones and watches, laptops and desktop computers. There’s a lot more worth knowing about Apple, though — in part because you may want to get to know the company better as a possible investment.

Here are seven interesting facts about Apple. See how many of them surprise you.

A young man is gawking at his smartphone, with his mouth ajar.

Image source: Getty Images.

No. 1: The company was recently valued at $2 trillion

Let’s start with its market capitalization, or market value. In August of 2018, Apple became the first company to be worth $1 trillion. Two years later, in August of 2020, Apple became the first company to cross the $2 trillion line, ending the month valued near $2.2 trillion. At the time of this writing, its market cap was roughly $2 trillion. To put that in perspective, the next biggest companies at that time are Amazon.com (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), both at $1.6 trillion, and Google parent Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), at $1 trillion.

No. 2: Apple’s stock has split five times

In late August, Apple split its stock 4-for-1, meaning that shareholders suddenly were in possession of four times as many shares, each valued at about a quarter of the pre-split price. (In other words, the total value of their shares didn’t change.) That was actually the company’s fifth split. Here’s the Apple stock-split history, showing how many shares someone who starts with 100 shares would end up with:

Split

Date

100 Shares Bought Pre-Splits Become:

2-for-1 split

June 16, 1987

200 shares

2-for-1 split

June 21, 2000

400 shares

2-for-1 split

Feb. 28, 2005

800 shares

7-for-1 split

June 9, 2014

5,600 shares

4-for-1 split

August 31, 2020

22,400 shares

Source: Yahoo! Finance, author calculations. 

No. 3: Apple sells many thousands of phones per hour

In 2018, Apple announced that it would no longer report how many phones it sold in each quarter, which would prevent analysts from figuring out average sale prices for the phones.

Prior to that, though, numbers were available, and they were eye-popping. For example, the folks at ZDNet.com looked at the company’s quarterly report for the period ending in December of 2017, when the company reported 77.3 million phones sold, and noted: “That means that for the 91 days that spanned the quarter Apple sold 849,450 iPhones a day, or 35,393 every hour, or 590 every minute. That works out at almost ten iPhones sold a second, for every second during that 91-day period. And remember that each of those iPhones sold for an average of $796.”

No. 4: Employees get generous discounts

As you might imagine, those who work for Apple get employee discounts on company offerings. That doesn’t mean that they can buy lots of discounted iPhones and Apple Watches each year to sell or give away. Here’s how the company describes its employee discount at Glassdoor.com:

Each year, employees can get a 25% discount on an iPod, iPad, or computer. Most Apple software can be purchased at a 50% discount, and AppleCare comes with a 25% discount. After 90 days on the job, employees can choose either $500 off the price of a Mac (excluding the Mini) or $250 off an iPad [this offer can be repeated every 3 years].

No. 5: Apple ships by air more than by sea

You might imagine, if a company is producing many millions of products each year outside the U.S., and most of those items need to get to the U.S. and other parts of the world, that they would be shipped by…ship.

That hasn’t been the case with growth stock Apple. It has relied significantly on air freight services, at times booking most available flights. Air transport may cost more, but it’s far faster, and that can keep products moving more directly from maker to buyer, without spending much time in transit or storage. It’s less risky, too, as spending weeks on a ship leaves products vulnerable to storms, ships sinking, and even possibly hijacking.

No. 6: Apple has hired big-time Hollywood directors

Remember Apple’s famous 1984 commercial, which debuted at the Superbowl and introduced the Macintosh personal computer? It was directed by Ridley Scott, who may be most famous for “Alien,” and who was nominated for Academy Awards for “Thelma & Louise,” “Gladiator,” “Black Hawk Down,” and “The Martian.”

No. 7: Apple takes leaks seriously

If you follow Apple, you’ll know that before major new releases, there are often some leaks disclosing details about them. As you might imagine, leaking is frowned upon by Apple — perhaps more than you think. Here’s a snippet of a memo reportedly sent to employees in 2018:

Leakers do not simply lose their jobs at Apple. In some cases, they face jail time and massive fines for network intrusion and theft of trade secrets both classified as federal crimes. In 2017, Apple caught 29 leakers. 12 of those were arrested. Among those were Apple employees, contractors and some partners in Apple’s supply chain. These people not only lose their jobs, they can face extreme difficulty finding employment elsewhere. “The potential criminal consequences of leaking are real,” says Tom Moyer of Global Security, “and that can become part of your personal and professional identity forever.”

There’s more to know about Apple, much of it fascinating and some of it surprising.

AAPL – Economic Outlook: Apple earnings will be missing the usual star attraction

Investors will be digging through Apple’s earnings call for clues about how the new iPhone is performing, but they may be harder to come by this quarter.

Apple

The end of Apple Inc.’s fiscal year usually leads to a game of “How is the new iPhone doing,” but that gets a little harder in 2020.

Apple AAPL, -0.61% pushed back the launch of its 5G iPhone because of the COVID-19 pandemic, which means initial sales of the newest Apple smartphone will not be included in fiscal fourth-quarter earnings this year, which the company is expected to report on Thursday afternoon. Investors typically look to the holiday-season forecast for an idea of how many iPhones Apple expects to sell, but Apple hasn’t given formal guidance in the past two quarters, citing uncertainties from the coronavirus crisis, and Wedbush analyst Daniel Ives doubts the company will issue traditional guidance this time around either.

Read: Apple brings 5G to iPhones but keeps the same price tags

Instead, investors will likely have to rely on more qualitative clues from Apple executives.

“I believe this time around they will some directional guidance around iPhone 12 demand and the trajectory into the December quarter,” Ives told MarketWatch. “Given it’s a massive iPhone product cycle, I would be surprised if Cook did not give some color around demand expectations for the holiday quarter.”

Apple may have slightly fewer holiday hints than normal, since two of its new devices, the iPhone 12 mini and the iPhone 12 Pro Max, don’t even become open for preorders until Nov. 6. Preorders for the iPhone started Oct. 16 and the device became officially available Oct. 23.

Still, Apple’s management team may share thoughts on some of the trends that make this year’s launch unique, including heavy subsidies from wireless carriers that could give consumers extra incentive to trade up even though 5G, the main selling point of this new iPhone line, likely won’t offer much benefit to smartphone owners at the outset.

Read: The 5G iPhone is reigniting the subsidy wars, which is good for Apple and consumers but not mobile carriers

Here’s what to expect from Apple’s fiscal fourth-quarter results.

What to expect

Revenue: Though Apple wasn’t able to sell any of its new iPhones in the September quarter, analysts aren’t projecting too much of a dip in the company’s overall fiscal fourth-quarter sales from last year. The FactSet consensus calls for $63.98 billion in sales, down from $64.04 billion a year prior. At Estimize, which crowdsources projections from hedge funds, academics, and others, the average estimate calls for $65.45 billion in sales.

Though analysts tracked by FactSet do model a sizable decline in iPhone revenue, calling for $28.8 billion compared with $33.36 billion a year ago, the company is expected to make up for it with solid growth elsewhere in the business. Analysts project $6.01 billion in iPad revenue and $7.79 billion in Mac revenue, up from $4.66 billion and $6.99 billion, respectively. Both categories are thought to still be benefiting from remote work and schooling trends, and Apple had a few days of availability of its newest entry-level iPad in the September quarter.

Analysts also project $7.28 billion in wearables, home and accessories revenue, up from $6.52 billion a year ago. The company’s new Series 6 Apple Watch launched in mid-September. Services revenue is expected to climb to $14.1 billion from $12.72 billion.

Apple is still expected to have eked out some annual revenue growth for the full fiscal year, which ended in September, despite COVID-19 challenges and the iPhone 12 launch delays. The FactSet consensus models $273.32 billion for fiscal 2020, up from $260.17 billion in fiscal 2019.

Earnings: Analysts tracked by FactSet call for 71 cents in earnings per share for the September quarter, down from 76 cents a share last year. Estimize contributors project 77 cents on average.

Apple is expected to have recorded positive earnings growth for fiscal 2020, with FactSet modeling $3.24 billion for the full period, compared with $2.97 billion in fiscal 2019.

Stock movement: Apple shares have risen following six of the company’s last seven earnings reports, including a 10.5% gain the day after the smartphone giant posted third-quarter results in July. The stock has rallied 19% over the past three months as the Dow Jones Industrial Average DJIA, -0.09%, which counts Apple as a component, has risen 5%.

Of the 39 analysts tracked by FactSet who cover Apple’s stock, 23 have buy ratings, 13 have hold ratings, and three have sell ratings, with an average target price of $121.27.

What analysts are saying

The early 5G rollouts from U.S. wireless carriers may not offer much in terms of speed advantages relative to 4G, but D.A. Davidson analyst Tom Forte argues that may not matter too much.

“With consumers working and learning remotely, in other words leveraging their home WiFi networks instead of those from the wireless carriers, Apple may get a complete, or at least a partial, pass for launching its first 5G device lineup before 5G was ready for prime time,” he wrote in a note to clients. “With a faster processor and high-speed connection (WiFi not 5G), consumers may love their new iPhones.”

Overall, Forte expects that Apple’s new phones “are better positioned than investors completely appreciate,” in part because people will be using them mainly from home instead of on underwhelming 5G networks, but also because carriers are offering generous discounts and consumers may have more spending money since they aren’t paying for travel or out-of-home dining as much.

He’ll be looking for commentary on how stay-home trends have benefited the iPad and Mac lines more than six months after remote work and schooling picked up due to the COVID-19 crisis. He expects an “outsized impact” on these categories and rates Apple shares at buy with a $120 price target.

Don’t miss: Apple rolls out a cheaper Apple Watch, subscription bundles and more

Wedbush’s Ives is intrigued by China dynamics, writing that this could be a big driver of momentum for the new line of iPhones.

“We are seeing considerable strength from the China region over the last few months (should be a source of relative strength in the September quarter) with positive trends heading into the all-important holiday time frame,” he wrote, while maintaining an outperform rating and $150 target price.

Apple could face questions about the Justice Department’s antitrust lawsuit against Alphabet Inc.’s Google GOOGL, +1.63% GOOG, +1.58%, which partly looks into Google’s payments to Apple for making the Google search engine the default option on iOS devices. Evercore ISI analyst Amit Daryanani notes that these licensing payments represent a high-margin business for Apple that may generate approximately 40 cents in annual earnings per share, or 9% of the company’s total.

“We think while licensing broadly remains an attractive part of [Apple’s] narrative, the Apple value proposition is substantially broader,” he wrote, pointing to “accelerating” iPhone unit growth, an “uptick in ancillary hardware attach rates” for things like AirPods and iPads, and better monetization of iOS users.

He has an outperform rating and $135 price target on the stock.

AAPL – Greater Than Expected iPhone 12 Demand Makes Apple Stock a Buy

Apple (NASDAQ:AAPL) shares dropped 2.6% on Monday after a $115.98 close. Since the company held its delayed iPhone 12 event on Oct. 13, AAPL stock has slid 6.8% — despite the fact the company delivered on virtually everything that had been expected. At this point, Apple is trading at mid-August levels. It’s struggling to recover to its $134.18 close just before the September tech stock selloff. Does this lackluster performance make an investment in Apple now a smart move? Or, are we at the point where the shine is off the $2 trillion company?

A close-up shot of different Apple (AAPL) iPhones in front of a purple background.

Source: Hadrian / Shutterstock.com

Apple’s stock earns an ‘A’ rating in Portfolio Grader and remains a strong pick for long-term growth. As for the shorter term, information is beginning to emerge about iPhone 12 sales. And I think what’s being reported is going to give Apple shares the boost they need to get back into growth territory.

Report Says iPhone 12 Demand Is Higher Than Expected

Apple stopped breaking out iPhone unit sales last year, and that means the company has been mum on iPhone 12 pre-order numbers. However, analysts with web analytics can get a pretty good picture of what’s happening. And the news is good for Apple.

Ming-Chi Kuo of TF International Securities tracked iPhone 12 pre-order sales, which kicked off last Friday. In the first 24 hours, Kuo says Apple sold up to 2 million iPhone 12 units. In comparison, last year the company reportedly sold 800,000 iPhone 11 units in that same initial 24 hours of pre-orders.

Strong demand during pre-orders don’t necessarily translate to equally strong sales when the new iPhones are available in stores. However, the early data is encouraging.

A Favorable Product Mix

Another positive surprise from the pre-order data is the product mix being snapped up by consumers. 

Apple released four different iPhone 12 models: the $699 iPhone mini, the $799 iPhone 12, the $999 iPhone 12 Pro and the $1,099 iPhone Pro Max. This pre-order covered only the iPhone 12 and iPhone 12 Pro (the two other models will be available in several weeks). It was expected that the cheaper iPhone 12 would be the more popular of the two. Last year, the iPhone 11 was outselling the iPhone 11 Pro models by a three-to-one margin after launch. 

However, Ming-Chi Kuo says this year is different. His numbers show the iPhone 12 and iPhone 12 Pro being equally popular: “The ‌iPhone 12 Pro‌ pre-order beat our expectation because of Apple core fans’ initial preference for high-end models, the strong demand in the Chinese market, and the coming peak season demand in the US and Europe.”

According to Kuo, the Chinese market is also going to have a big role to play in iPhone mini sales. He has revised his estimates of iPhone 12 mini sales down to 10-15% of units (from 20-25% of units) based on weaker demand for a small-screen device in China. An iPhone 12 sales mix that favors the larger — and more expensive — models is good news for Apple’s iPhone revenue numbers. Given the importance of that iPhone revenue in driving AAPL stock growth, this is a very good trend for Apple shareholders as well.

Look Beyond the iPhone

This goes without saying, but smart Apple investors are looking beyond the iPhone for long-term growth. Yes, the iPhone still accounts for the lion’s share of Apple revenue. But as CEO Tim Cook pointed out when the company reported its latest quarterly earnings, the company is seeing double-digit growth in Services revenue. In addition to the iPhone and Services like Apple TV+ and Apple Music, there is also the iPad, the Mac, the Apple Watch, AirPods, the Apple TV, HomePod smart speakers, Beats headphones and a flourishing accessory business.

And the company is working on everything from self-driving car technology to AR glasses. The next must-have Apple product could emerge from Cupertino at any time.

Bottom Line on AAPL Stock

The preliminary iPhone 12 pre-order numbers are unofficial and unconfirmed by Apple. And 24 hours of pre-orders doesn’t mean the trends are going to translate to in-store sales. Still, the likelihood of the 5G iPhone 12 kicking off an upgrade super-cycle that could see up to 30% of current iPhone owners upgrade seems more likely than ever.

If that happens, the current dip in AAPL stock is going to look like a huge buying opportunity in hindsight. Even if iPhone 12 sales are just okay, this company has so many ways to win that long-term growth is all but assured.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.