Apple's iPhone is already one of the most popular consumer products of all time. And it's usually a safe bet that when Apple makes big changes to its design, like the iPhone 12, sales will skyrocket. But the past year was anything but normal.
In February, Apple warned that sales and manufacturing of its products are likely to be affected by the coronavirus. Soon after, economies around the world fell into recession and the unemployment rate spiked as the pandemic changed the way we lived and locked us in our homes.
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Apple is expected to be released on Wednesday Sales and profit data for the holiday shopping season, which usually runs from October to December. This period was especially busy for Apple too, including the introduction of the highly anticipated iPhone 12 with 5G wireless and new laptops and desktop computers. The company also expanded its services to include Apple Health Plus Digital Health Class Service for $ 10 per month and Apple One Bundle pricing, which offers access to its TV, music, and data storage services starting at $ 15 per month.
The best smartphone for 2020
According to surveys by Yahoo Finance, Wall Street analysts expect an average profit of USD 1.40 per share on sales of USD 102.76 billion. This corresponds to a jump in profit of 12% and a jump in sales of 16% compared to the previous year. And all of this despite the crushing COVID-19 pandemic that is still devastating communities around the world.
"Overall, a strong iPhone year seems likely," wrote Bernstein analyst Toni Sacconaghi in a message to investors last week. He added that the iPhone 12 Pro is still on reorder in most major markets except the US and France, even though it was launched back in October.
With Apple reporting such strong sales, it will likely be seen as a leitmotif for the broader tech industry, whose companies have become even more powerful during the pandemic.
Other companies that have made big profits over the past year include Amazon, which saw "record demand" last year, particularly during the holiday shopping season when people are switching to online shopping. In fact, Google and its parent company Alphabet have exceeded Wall Street's rosy expectations as marketers spend huge amounts of money to get people's attention online. And Slack, the business collaboration app, sold for $ 28 billion to software giant Salesforce, nearly double what it did before it went public in 2019.
People have rushed to buy new computers and subscribe to collaboration tools like Slack, Zoom, and Microsoft Teams to work and study remotely. Most students still take classes through video chat. And, despite the successful development of vaccines, daily life is not expected to return to normal for another year.
Smartphones have also become even more important as they have become the all-round device for work, life and entertainment. Industry Watcher IDC analysts expect smartphone shipments to rise 9% this year, thanks in part to new flagship features like 5G.
Lower prices also encourage demand. While Apple's iPhones haven't fallen in price over the past year, cellular operators like AT&T, Verizon, and T-Mobile offered significant discounts to get customers on 5G.
It helps that CNET reviewer Patrick Holland named the iPhone 12 among the top-rated CNET phones of all time, an opinion shared by many other tech reviewers. "5G support, a new striking design, improved cameras and four different models make the iPhone 12 an absolute unit," he wrote in his review.
Shinier Apple
Consumers grabbing a new iPhone are giving Apple more opportunities to connect people to its music, TV, games and news services, all of which are powered by its hardware.
Apple also caught the attention of the technology world with its computers. The company announced a new line of computers that run on chips similar to the iPhones and iPads. The M1 chip, as Apple called it, was designed to provide more performance with less battery life than the Intel chips that Mac computers have been running on since 2006.
"From our point of view, the iPhone 12 was Apple's most successful product launch in the past 5 years."
Katy Huberty, Morgan Stanley
Because of this, many analysts expect all Apple companies, including iPads, Macs, and services, to grow.
"Apple's portfolio was better positioned than ever this past Christmas season," wrote Brian White, analyst at Monness Crespi Hardt.
What isn't so clear is how much each Apple company, and especially its services, will grow.
The company's $ 5 a month Apple TV Plus service didn't get as much attention as the $ 7 a month Disney Plus service or HBO Max for $ 15 a month. Both subscription services, launched in the last year or so, have drawn people in with new rates at popular brands. Disney's had The Mandalorian from its Star Wars brand and WandaVision from its Marvel division, both of which have helped attract more than 86 million, much more than any other new service. HBO has since relied on cousin Warner Bros., who released their new Wonder Woman 1984 movie online on December 25th.
Netflix continues to be the largest streaming service with more than 200 million subscribers.
But even if Apple's services don't attract everyone's money, devices like the iPhone will still be one of the most important ways people see them.
"From our point of view, the iPhone 12 was Apple's most successful product launch in the last 5 years," wrote Katy Huberty, an analyst at Morgan Stanley.
We'll find out on Wednesday if that's true.
Next: Read our iPhone 12 review.