The holiday season is traditionally a strong one for Apple Inc. (NASDAQ:AAPL). The latest iPhone sees its first full quarter of sales, students are still Mac shopping and consumers snap up Apple devices for gifts.
Last year, the company set its all-time quarterly revenue record, pulling in $78.4 billion. AAPL stock surged nearly 5% when those Q1 2017 numbers were released.
This year, the company is expected to release a flurry of new products — including the highly anticipated iPhone 8 — setting the stage for an AAPL holiday quarter that leaves last year’s in the dust.
Q1 2017: Record Setting AAPL Holiday Quarter
In January, Apple reported its Q1 2017 earnings, covering the holiday quarter ending December 2016. It was a huge quarter with record setting revenue of $78.4 billion — the most the company has ever earned in a single quarter. It’s only natural that AAPL stock spiked 4.9% the next day on those strong numbers.
But when you look at the product mix for that quarter, Apple was going into the holidays with the new iPhone 7, the new Apple Watch Series 2 and the new MacBook Pro. The rest of its product line was relatively stale, including an iPad Air 2 that hadn’t been updated in years and an Apple TV that booked an actual sales decline over previous years. The new Apple Watch was a refresh of the original and the new MacBook Pro was aimed at a limited demographic.
If the result of that was an AAPL holiday quarter for the record books, just picture what is about to happen this year.
Will the Holiday Quarter Boost AAPL Stock Further?
Going into this holiday quarter, Apple will have a trio of new smartphones: the iPhone 7s, iPhone 7s Plus and most importantly, the 10th anniversary iPhone 8. With the iPhone 8 in particular expected to kick off an upgrade ‘super cycle’ thanks to an all-new design, expect AAPL to move more iPhones than ever.
The company is also releasing an all-new product in December. The HomePod will hit shelves just in time for Christmas, and Apple’s Siri-powered answer to Amazon.com, Inc.’s (NASDAQ:AMZN) Amazon Echo will be entering a red-hot smart speaker market.
Apple also has a full suite of new iPads this year, including new iPad Pros and an all-new (and much more affordable) consumer iPad that has been credited with turning around AAPL’s slumping tablet sales, breaking a 13 straight quarter decline.
The company is also rumored to be unveiling two more product updates this fall: the Apple Watch Series 3 and a 4K Apple TV. While last year’s Apple Watch release was a fairly basic refresh of the original, the new Apple Watch is expected to offer key new functionality, including cellular capability — so no iPhone is required.
Consumers have been hounding AAPL to update its Apple TV set-top streamer with 4K support, and the company is reportedly ready to go with a new box that supports both 4K video and HDR.
There’s also the $5K and up iMac Pro coming in December for professionals. And Apple finally seems able to produce its unexpectedly popular AirPods wireless earbuds in volume, just in time for the holidays — they were sold out for most of last year and in limited supply for much of 2017.
In other words, all the pieces are in place for this AAPL holiday quarter to blow past the record-setting numbers the company posted for last year. Expect big numbers for Q1 2018 and expect AAPL stock to react accordingly.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.