Ever since Apple's value blew past a trillion dollars a few years ago, analysts and tech industry experts alike have frequently wondered aloud, "How much larger can it get?"
We'll get an answer Thursday, when Apple announces its fiscal first-quarter sales and tells us how many iPhones, Macs and other products it sold during the holiday shopping season. Apple has built a lot of its business around this period, timing product launches -- like those of its well-reviewed, its revamped , its latest , and the -- to maximize sales as people hunt for gifts for family and friends. After the quarter's December close, investors pushed Apple's shares so high that the company's value , despite ongoing .
On average, Wall Street analysts expect the quarter to deliver new all-time financial records of $1.88 per share in profit on $118.38 billion in revenue, according to surveys published by Yahoo Finance. Though that's impressive, Apple isn't expected to show as much growth as it did in the 2020 holiday shopping season. That's when the iPhone 12, Apple's first 5G-compatible device, , while sales jumped more than 17%.
That wasn't all, though. Apple has continuously said over the past year that its Mac computers and iPads were seeing record demand as well, in part thanks to the company's highly anticipated new M1 "Apple Silicon" chips. That technology scored well among reviewers, including CNET's, who ran tests that showedand . "It was zippy," CNET's Andrew Hoyle wrote of using the new .
Now analysts are broadly expecting 2021's holiday shopping season to mark another record for Apple.
"The performance seen by Apple in the quarter was despite an unprecedented chip shortage out of the Asia supply chain," Wedbush analyst Daniel Ives wrote in a Monday message to investors. Despite Apple's established position as one of the world's most highly valued companies, Ives says he still expects to see Apple's "renaissance of growth" continue and its shares "outperform."
An Apple spokesman declined to comment ahead of the company's earnings report.
No matter what Apple says in its financial report Thursday, the results will be seen as a bellwether across the tech industry, and potentially beyond. But that report may prove an outlier as other companies struggle with supply and worker shortages, disappointing already dour Wall Street investors worried by saber rattling between Russia and the US over Ukraine., , and
"Given resilient iPhone and Mac demand, we see Apple as a high-quality 'flight to safety' name to own during market volatility," Cowen analyst Krish Sankar wrote in a note to investors. He too labels Apple's stock at "outperform."
Apple has long operated one of the most successful supply chains, particularly as it navigated disruptions from the COVID-19 pandemic. Even so, Apple's executives have said they believe the company hasdue to silicon chip shortages and manufacturing problems amid seemingly ceaseless demand.
Rod Hall, an analyst at Goldman Sachs, said he's "slightly cautious" about Apple's prospects, considering tech's continuing challenges with the global supply chain. In a note to investors, he warned that even though Apple may have been able to manage the chip shortages better than most, he'll be closely listening to executives as they give commentary on a post-earnings conference call.
Apple has also largely escaped the scrutiny that tech giants like Alphabet (née Google) and Meta (née Facebook) have faced over how their respective erode people's privacy and trust in big tech.
Whatever Apple announces Thursday, it'll come at a time when investors are questioning Big Tech's future. Netflix shares have plunged more than 35% this year, driven in part by the company's own predictions last week that it would add far fewer subscribers $1,199.78 per share at the start of the year, driven in part by the company's .. Electric-car giant Tesla's stock, meanwhile, plummeted nearly 28% from
It all comes down to the iPhone
The iPhone remains king at the Cupertino, California-based company, even as Apple fans and industry watchers dissect each of the company's new product lines and business moves.
Last year, the iPhone represented 52% of the company's $365 billion in revenue, a slight increase from the 50% it represented in 2020 and a slight decrease from the 54% in 2019. That's part of Apple's seemingly endless conundrum: Its position as one of the largest companies ever is tied to the iPhone's success.
Apple has tried to build on that success, announcing ambitious services offerings, including the $5 per month Apple Arcade and the . Its other iPhone add-on-type products and have performed well too, analysts say., the
Over the past year, tech executives from game companies to social networking giants to, yes, even Apple have begun publicly discussing a new term for the types of experiences these headsets will make possible:. That's a catchall description of apps and experiences people can share in connected virtual worlds like a video game.
The metaverse "is an attempt to redefine our entire relationship with the internet, from virtual communities to ownership of digital content. It snakes into gaming, cryptocurrency, NFTs, teleconferencing software and 3D scanning. It's... a lot," CNET's Scott Stein wrote. "A year ago, nobody even talked about the idea of a metaverse. Now it's spread across countless news stories."
For Apple, though, the metaverse may represent more than the next step in computing: It may finally be the product to take the financial crown from the iPhone.
But don't expect CEO Tim Cook to spill the beans about his plans while speaking with analysts on a conference call Thursday. Those reveals are typically reserved for Apple's splashy events, whether in person or entirely virtual, as .
Instead, when analysts and investors wonder how much larger Apple will get, what they'll mean is how many more iPhones can Apple sell, as well as maybe iPads, Macs, Apple Watches, AirPods and all sorts of other tech, including the company's (in).
"We'd expect a bullish installed base update," Morgan Stanley analyst Katy Huberty wrote in a message to investors, citing upbeat reports from Apple throughout the past year. Though she also rates Apple's stock at "outperform," she'll be listening for any other signs of how the pandemic and supply chain are affecting the company.