Apple will announce its fiscal third-quarter results tomorrow and analysts believe that if it issues guidance for the fiscal fourth quarter, it could hold the clues to the
iPhone 12 launch date, according to
Business Insider.
Due to the impact of the COVID-19 pandemic, revenue is expected to fall by $2 billion in the third quarter. The company’s sales were also affected in its
fiscal second-quarter because of the outbreak and the wearables and services wing were the silver lining. The iPhone maker did not issue guidance for the fiscal third-quarter when it revealed second-quarter earnings because of the uncertainties posed by the coronavirus.
According to the estimates of Wall Street analysts, Apple will post revenue of $52.1 billion, nearly a 3 percent year-on-year decrease. Services are expected to remain a bright spot. Demand for some products might have gone up too because of remote work and learning.
Tomorrow’s call will be more about what’s to come
Overall, analysts are not too concerned about the third-quarter results and have branded it a “throwaway quarter.”
Instead, tomorrow’s results are more about the upcoming iPhone 12. Industry insiders have been looking forward to the first 5G iPhone for a long time and this is what makes this year so important. Although Apple is unlikely to confirm its first
5G-enabled smartphone during the earnings call, analysts are hoping to guess the
launch date based on whether the company issues guidance for the next quarter.
Since the past few months, we have been listening to varied reports about the
launch of the iPhone 12, with some leaks
hinting at a delay. Some of the rumors had alleged that the coronavirus-related restrictions have disrupted the manufacturing process.
So, tomorrow, investors would want to find out if the handset is still on track and that the company is still making products.
If the Cupertino giant issues guidance that’s low, it would be an indication that the iPhone 12 is getting delayed. On the other hand, if the guidance is seasonally higher when compared to the last few quarters, it would be a sign that the launch plans have not been disrupted because of the virus.
RBC Capital Markets’ Muller said:
If they issue guidance that’s kind of low, I think from that you can kind of triangulate that the phone might be delayed. If they issue guidance that is seasonally higher compared to these last couple of quarters, then you can maybe think that the phone [may] get released sooner rather than later.
Per most estimates, the iPhone 12 announcement will take place between mid-to-late September and October. It remains to be seen if all the models will go on sale at the time.
Is iPhone 12 the next big thing after the iPhone 6?
Before the coronavirus struck, Apple was reportedly hoping that the iPhone 12 would start a
super cycle. Although most analysts believe this could still happen, some have
cast their doubts. So, Apple’s expectations for the next quarter will also help analysts determine whether the company still has high hopes for its new lineup.
A
5G supercycle will also help the manufacturer offset any pandemic-fueled impact on other units. Overall, market watchers seem quite optimistic about the iPhone 12 and believe it will be the most important product cycle Apple has seen since the release of the
iPhone 6 in 2014.
According to Wedbush Securities analyst Dan Ives:
At the end of the day, the Apple growth story (and stock) moving higher all rests on the iPhone 12 supercycle coming down the pike, which we believe is the most significant product cycle Cupertino has seen since iPhone 6 was released in 2014.
Previously, the
iPhone 8 and
iPhone X were expected to replicate the success of the iPhone 6 but that didn’t happen. The ground seems ripe for the iPhone 12 though. Apparently, 350 million out of the current installed base of 925 million
are up for an upgrade, and this could surely help drive demand. Another thing that could work in Apple’s favor is iPhone 12’s price,
provided it starts at $649, and not $749
as reported recently.
