New products, stimulus and remote work/learning purchases are currently boosting Apple’s sales, but a healthy macroeconomic recovery will probably have a big impact on Apple’s sales growth over the rest of 2020.
Apple topped depressed March quarter estimates, with iPhone revenue (though down 7% annually) beating consensus by about $900 million and Services revenue (up 17%) beating by about $500 million. The company declined to provide June quarter sales guidance, but did mention on its earnings call that it has seen an “across the board” improvement in demand during the second half of April following a “sharp decline” during much of March and early April.
It’s possible that remote work/learning purchases could remain strong for a while, given that many companies, schools and colleges appear set to reopen slowly in the coming months. Likewise, some of Apple’s services businesses, such as App Store transactions and Apple Music and iCloud storage subscriptions, should continue getting a boost from consumers spending more time at home than usual.
In the absence of ongoing stimulus boosts, a macro environment featuring high unemployment and major disruptions to industries such as travel, hospitality, auto and energy might not be a good one for discretionary tech and electronics spending — even if lower spending on things such as travel and dining/entertainment provides an indirect boost.
MacDailyNews Take: Of course, a healthy macroeconomic recovery is crucial for Apple, as it is for most people and most companies. A rising tide lifts all boats. Hopefully, the “V-shaped” recovery that President Trump said Apple CEO Tim Cook foresees will come to fruition!
Hopefully the race to a COVID-19 vaccine will be won as quickly as possible because waiting until the second half 2021 or even longer, until the first half 2022, seems untenable (although we’re sure we’ll all adjust as best we can; humans are quite adaptable when push comes to shove). Here’s to this century’s Jonas Salk!