Munster: 2020 COVID-19 downturn may be positive for Apple

The 2020 COVID-19 downturn may prove to be a positive for Apple, longtime analyst Gene Munster writes in a note to clients seen by AppleInsider.

Apple Park in Cupertino, California
Apple Park in Cupertino, California

William Gallagher for AppleInsider:

Munster advises that he expects Apple’s earnings to be down by 10% compared to the June quarter last year. Noting that Apple has not issued guidance, he says the results will prompt investor debate, but that the underlying figures are positive for Apple now — and especially for the future.

“[The] 2020 downturn may prove to be a positive for the company, given Apple’s financial strength, anchored by what we expect is $180B in cash,” he says, “which will be used to retain and acquire talent and technologies that will advance their agenda.”

That agenda includes pressing ahead with its planned products and Munster argues that the “powerful trends” Apple is following will run through the next decade. Specifically, he sees “5G driving both an upgrade cycle and trailing benefits from what the technology enables.”

He also expects to see “software services continuing to penetrate new industries,” and Apple TV+ “original content and streaming entertainment increasing share of media consumption.” Alongside these, Apple’s current health and wearables will become increasingly significant, and Apple Pay will continue to grow.

Much more in the full article here.

MacDailyNews Take: Munster also highlights many additional elements that bode for a bright future for Apple, following the COVID-19 downturn, including AR smartglasses, autonomous vehicles, digital health, working/learning from home, services, etc.

10 Comments

    1. Amazon, UPS, Fedex, your Cell Company, and those people that lived within their means, and yes companies like Apple that have great fundamentals will be better off. No different than fall 2008.

      Also if you invested 10-25% of your savings in blue chip companies or real estate over the years you will weather the storm better than those that lived like drunken sailors in the same period.

        1. Your heart is in the right place, but I’m more worried about people of all ages, who survive hospitalization. The long term damage in seriously ill survivors is unclear and between the blood clotting and autoimmune responses, does not look good!

          1. Apparently, even asymptomatic persons who barely noticed they had the virus, are showing lung scarring and other effects that may not cause problems until later in life. I expect a drop in life expectancy as a result.

  1. Meanwhile, most of the citizenry has less than $1k of savings and the avg millennial has $60k of debt.

    Have they all been living like drunken sailors, or foolishly thinking something/someone was going to provide relief?

    I’ve been readings fair amount of advocacy for a debt jubilee.

    1. I’m fairly certain this has been the American way for a long time. Americans are known to live from paycheck to paycheck while holding large amounts of credit card debt. Most of these people have to show off how much they have in the way of cars, clothing and gadgets to prove they are living large. They need show what they have on Facebook and Youtube and don’t seem to worry about debt at all. Many don’t even bother to pay back their college loans. No matter. They can go back and live with their parents. I trust many of these people will continue to purchase iPhones and MacBooks just to keep up with their friends. It’s not smart but that’s just how many people live their lives, praying that they’ll hit the lottery big time. And when they do hit the lottery, I hope they buy lots and lots of Apple products. All praise to AppleCard. Sweet. C’mon, Apple. Let those earnings shine.

    2. Yes they have, and most if they work and have a 401k can’t be bothered to just match the 4% their company gives them, also half country doesn’t even want single payer or unions, like the rest of the western world.

      Most haven’t learned anything from 2008 if you don’t save and invest you are up the creek.

      Americans have and continue to spend and live like drunken sailors (long before 2020), mention wait and save 6 to 12 months to buy something, and the eyes for most (Americans) will graze over.

      However, if you are on this site you know about Apple Silicon, which is a massive long term opportunity for investment. How many times must Apple serve up softballs.

    3. Yes debt and more debt, however say work together on the front end for single payer or infrastructure beforehand half the country goes nuts, a large portion of population would rather wait until the last minute for everything….

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