We're about to learn if Apple's iPhone 12 is a smash hit
The tech giant's latest iPhones launched later than normal last year, and backorders piled up. Now we learn what that means for Apple.
Ian SherrFormer Editor at Large / News
Ian Sherr (he/him/his) grew up in the San Francisco Bay Area, so he's always had a connection to the tech world. At CNET, he wrote about Apple, Microsoft, VR, video games and internet troubles. Aside from writing, he tinkers with tech at home, is a longtime fencer -- the kind with swords -- and began woodworking during the pandemic.
is already one of the most popular consumer products ever. And normally, it's a safe bet that when Apple makes big changes to the phone's design, as it did with the
, sales go into overdrive. But this past year has been anything but normal.
In February, Apple warned that sales and manufacturing for its products were likely to be impacted by the coronavirus. Soon after, economies around the world slid into recession and unemployment rates soared as the pandemic upended our way of life and kept us locked down in our homes.
On Wednesday, Apple's expected to release sales and profit data for the holiday shopping season, which typically stretches from October through December. That period was particularly busy for Apple, including the launches of its highly anticipated iPhone 12 with
wireless and new laptop and
. The company also expanded its services with the $10 per month Apple Fitness Plus digital health class service and its Apple One bundle pricing, offering access to its TV, music and data storage services starting at $15 per month.
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Wall Street analysts on average expect that will all translate to $1.40 per share in profits on $102.76 billion in sales, according to surveys published by Yahoo Finance. That amounts to a 12% jump in profits and 16% leap in sales, compared with last year. And all this despite the crushing COVID-19 pandemic that's still ravaging communities around the world.
"Overall, a strong iPhone year appears likely," Bernstein analyst Toni Sacconaghi wrote in a message to investors last week. He added that the
iPhone 12 Pro
is still backordered in most major markets except the US and France, despite launching back in October.
If Apple does report such strong sales, it'll likely be taken as a bellwether for the broader tech industry, whose companies have become even more powerful during the pandemic.
Other companies that have made big gains over the past year include
, which has seen "record demand" over the past year, and particularly during the holiday shopping season, as people switch to online shopping. Google, and its parent company, Alphabet, as well have outperformed even Wall Street's rosy expectations as marketers spend big to get people's attention online. And Slack, the business collaboration app, was sold to software giant Salesforce for $28 billion, nearly twice its value before it went public in 2019.
People have rushed to buy new computers and subscribe to collaboration tools like Slack, Zoom and
Teams in order to work and learn remotely. Most students are still attending classes over video chat. And despite the successful development of vaccines, daily life isn't expected to return to normal for as much as another year.
too have become even more essential, as they've become the do-it-all device for work, life and entertainment. Analysts at industry watcher IDC expect smartphone shipments to jump 9% this year, thanks in part to new flagship features like 5G.
It helps that Apple's latest iPhones have received positive reviews. CNET reviewer Patrick Holland named the iPhone 12 among CNET's highest-rated phones of all time, a sentiment shared among many other tech reviewers. "5G support, a new striking design, improved cameras and four different models all add up to make the iPhone 12 an absolute unit," Holland wrote in his review.
Consumers snatching up new iPhones means more opportunities for Apple to hook people with its music, TV,
and news services, which are all powered by its hardware.
Apple caught the tech world's attention with its computers too. The company announced a new line of computers powered by chips similar to its iPhones and
. The M1 chip, as Apple calls it, was designed to offer more performance while using less battery life than the Intel chips that Mac computers have run on since 2006.
That's part of why many analysts say they expect all of Apple's businesses, including iPads, Macs and services, will grow.
"Apple's portfolio was positioned better-than-ever heading into the recent holiday season," Monness Crespi Hardt analyst Brian White wrote.
What isn't so clear is how much each of Apple's businesses will grow, and particularly its services.