Apple’s AAPL third-quarter fiscal 2021 results, to be reported on Jul 27, are expected to have benefited from continued momentum in the Services business.
The segment, which includes revenues from the App Store, Apple Music, iCloud, Apple Arcade, Apple TV+, Apple News+ and Apple Card, accounted for 18.9% of sales in second-quarter fiscal 2021.
Apple currently has more than 660 million paid subscribers across its Services portfolio. The App Store continues to draw the attention of prominent developers from around the world, helping the company offer appealing new apps that drive App Store traffic, thereby expanding subscriber base.
The Zacks Consensus Estimate for Services revenues currently stands at $16.57 billion, indicating 26% growth from the year-ago quarter’s reported figure.
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Apple’s Non-iPhone Portfolio to Boost Revenues
Apple’s non-iPhone portfolio, that comprises Mac, iPad and Wearables, is expected to have aided top-line growth in the fiscal third quarter.
This Zacks Rank #3 (Hold) company’s Mac sales are expected to have been driven by the ongoing work-from-home and online-learning waves. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Markedly, PC sales were up 13.2% year over year to 83.6 million units during the June-end quarter, per IDC’s estimates. Market research firms placed Apple in the fourth position with respect to PC sales, while Lenovo LNVGY ranked #1, followed by HP HPQ and Dell Technologies DELL at #2 and #3 spots, respectively. Per IDC, Apple’s Mac shipment grew 9.4% year over year.
The Zacks Consensus Estimate for Mac revenues stands at $7.91 billion, implying 11.8% growth from the figure reported in the year-ago quarter.
Apple launched its flagship desktop iMac computer in the to-be-reported quarter. The latest machine comes in seven different colors with 1080p FaceTime HD camera, better speakers and improved microphones for video conferencing, along with an upgraded power adapter that can magnetically attach itself to the back of the iMac and four USB-C ports.
These iMac computers offer three new keyboard options, including a standard color-matched keyboard, a keyboard with a Touch ID fingerprint scanner, and another with a fingerprint scanner and a number pad. The company is also offering Touch ID for the first time in iMac through a dedicated security component on the keyboard that communicates directly with Secure Enclave in M1.
The consensus mark for iPad revenues is pegged at $6.96 billion, suggesting 5.8% growth from the figure reported in the year-ago quarter. iPad demand is also expected to have remained high due to online learning and increased adoption among enterprises.
Apple launched a new iPad Pro lineup with a faster processor, 5G connectivity and new cameras, along with the same 11-inch and 12.9-inch screen sizes as the previous version. The 12.9-inch iPad Pro features a new Liquid Retina XDR display engineered with a new cutting-edge mini-LED design.
Apple is also riding on its strong market share in the wearables space. The company’s endeavor to add healthcare features to its smartwatch has been a game changer for the device that faces significant competition from the likes of Garmin, Alphabet, Sony, Xiaomi, Samsung Electronics and Huawei Technologies.
The consensus mark for wearables is currently pegged at $7.93 billion, indicating growth of 23% from the figure reported in the year-ago quarter.
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