Investor confidence is high that Apple can weather the coronavirus pandemic better than most, but with tumbling demand, factory shutdowns, and the closure of retail stores across the world, there will be no shortage of questions when the iPhone maker posts quarterly earnings on Thursday.
Here are five key topics on the minds of investors and analysts ahead of the numbers.
1. The impact of Covid-19:
January is expected to have been a solid month, following Apple’s blockbuster holiday quarter. Back then, the company projected a rise in revenue of between 9 and 15 percent for the quarter — a wide margin intended to reflect coronavirus uncertainties.
2. Any mention of 5G:
Apple is notorious for staying quiet on future projects, but some analysts are holding out hope that the iPhone maker will want to reassure investors that its first 5G-capable phone, widely anticipated to be weeks or even months behind its typical September launch date, remains on track.
Investors will want to know if Apple now has enough visibility to forecast revenue in what is likely to be the most challenging and uncertain quarter since the financial crisis.
More than a third of handset sales in the US, its largest market, typically come from retail shops operated by the likes of T-Mobile, Sprint, and AT&T. With many of those stores closing, the impact could be huge, said Tim Hatt, head of research at GSMA Intelligence.
In January, Apple executives said they expected to have 600m people subscribing to one of its services by the end of the year, part of a multiyear move to increase revenue and smooth out quarterly dips and jumps caused by hardware launches.
In the past quarter, the group’s services arm is likely to have seen revenues rise 18 percent to $13.5bn of revenue, according to financial analyst Neil Cybart.
With millions of employees working from home, more people are making calls on their computers and paying attention to their health — a solid set-up for sales of AirPods and the Apple Watch.
Yoram Wurmser, an analyst at eMarketer, said that both Apple products had multiple competitors outside of the Apple ecosystem, but “none of them have anywhere near the reach that Apple has . . . so they definitely have the playing field right now”.
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