Apple Earnings Fueled by Strong iPhone 12 Demand By Bloomberg Technology

What's your first takeaway from this yeah I mean these numbers are, are solid. You know our expectations were for the iPhone to be very, very strong. We were substantially above consensus and uh. They came in very nicely. Uh total sales was above our estimate so from every different product line, whether you're looking at iPhones, macs, iPads, wearables and the services business. Remember, that's almost 2x the margin of the products business um this is a is a very clean quarter.

The question is: what's in the stock versus? What's not I mean this is a stock, that's trading at a 35, multiple, so um people had high expectations, but in our view this is a very, very solid quarter. Yeah 35, multiple uh, how queen uh Anand uh. Let's, let's talk about the milestone. I Caroline mentioned this uh. They did across the 100 billion dollar mark for a quarterly revenue, there's only a handful of companies that have ever been that, obviously Walmart the one most consistent and uh.

I think the general sense here, though, is that you know apple has sort of become this juggernaut. It is a cash generating machine, it is a revenue growth machine, no matter what actually gets investors excited, though, at this stage I mean: what more can they do given apple's size given apple's multiple? That would actually make investors think okay, this stock can really sort of appreciate. You know another 80 like it did last year. Yeah look, I mean that's a great question, but the vectors that drive the fundamentals of this company are still the basic two ones is iPhone units and remember: the iPhone is still skewing to the upside from a price mix perspective. So we expect asps to be at the high end and from the color that we'll get on the call and from IDC data, etc.

We actually have a view that ID that asps are going up right. So the two vectors that are independent here, that drive apple are iPhone units and the services business and the services business, obviously is has a dozen sub-segments within it, and it is a very margin, rich business, and we think that overall, this is a business that is, that is going to add uh to the platform capability. That apple has so again. Those are the two big things I mean the the car is nice. All the other new buzz products are nice, but this is a two vector story which is iPhone units and services sales.

What about geographies? What about china still going strong yeah? So, obviously, the two uh theaters that are very important um now to the apple story. Are china and the US, and the emerging story, is one of India right if they're able to somehow create a platform that creates appeal within India, either for the products business or at least the services, then this is a business that could add several tens of billions of revenue to the overall platform over a period of time and from a manufacturing basis. That's important and from a product sort of total addressable market India is important. So those are the two markets now us and china today, but in the future it's uh, the Indian market, Anand. What's the biggest risk facing this company? Look I mean it's got a 35 multiple.

This is a company with 100 billion plus in quarterly sales, and this has got a 35 multiple, so expectations are clearly very, very high, and this is not going to be a straight line up into the right kind of situation, so you're going to have bumps along the road both in units and in services sales. So I think that's that's one key risk for sure, and then the other key risk is that you know you have sort of a slowdown in the overall consumer market or overall, slow down and personal electronic sales, and that could sort of hurt the iPhone business and smartphones generally, but for the next couple of years we just don't see that.

Source : Bloomberg Technology