Investors who follow Apple Inc. (NASDAQ: AAPL) said to watch for a $100 billion revenue quarter when it announces earnings. However, that may be the start of a run, fueled by the 5G and Apple’s services business that could push the year to $400 billion which would make it 75% the size of Walmart, the country’s largest company by sales, but much more profitable than the retailer.
MarketWatch editors commented:
The smartphone giant is expected to post its first-ever quarter with more than $100 billion in revenue Wednesday, driven by a strong early performance for its new iPhone 12 line as well as continued demand for Macs and iPads for remote work and school needs.
The roll-out of superfast 5G has only started. It will be available in most large cities, not just in the U.S., but also in Asia and Europe. The iPhone 12 is Apple’s first smartphone that works on this service. Over the course of the year, city after city, and region after region will offer more access to 5G, as companies like AT&T and Verizon spent tens of billions of dollars on infrastructure.
Apple’s services business, its fastest-growing has launched businesses that could double in size this year. The most obvious is Apple TV+. It is among the smaller U.S. streaming services, which means it has some room to grow. While the increase in subscribers to Netflix has risen above 200 million, on a percentage basis, it may well not grow as quickly as Apple TV+, as Apple adds content, and leverages its hardware base as a means of distribution, particularly for people who get the service free when they buy a new iPhone, iPad, or Mac.
It also appears that overhauls of the Mac and iPad will fuel growth throughout the year as loyalists upgrade for newer features.
Apple’s success will need to be colossal to reach $400 billion in revenue. In its last fiscal, the figure was $275 billion. But, Apple is in the midst of what analysts call a “supercycle”. The pace of customer upgrades to new products has hit an unprecedented pace.
2021 may be the year Apple explodes at a pace that it has not hit for decades.
Apple’s market value now 20x IBM
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