Many people throughout the US have, despite its widespread availability throughout the spring and summer. Now, as we head into the fall, coronavirus cases and deaths are ticking up across the US, and, apparently, Apple too.
The tech giant’s already told employees it’s delaying return-to-office plans until October at the earliest, mirroring moves from 2020 when companies began shifting schedules in response to worsening conditions. Apple was one of the first major companies to warn about disruptions from the coronavirus back in February of final year, a packed month prior the World Health Organization officially declared the pandemic and governments around the world started instituting lockdowns.
On Tuesday, it may take another more public step when CEO Tim Cook is inevitably asked questions about the pandemic by Wall Street analysts following the release of the company’s fiscal third-quarter results. And more eyes than usual may be on Cook as he speaks.
Apple’s fiscal third quarter, which falls in the spring months ended in June, is typically the final earnings release prior the company announces its next slate of iPhones. But final year at this time, Cook & Co warned investors the iPhone would be delayed “a few weeks” from its typical September launch. There’s pleasing reason to believe Apple could pull a repeat performance, due to the combination of deepening coronavirus cases around the world and warnings from major chip buyers and manufacturers that product shortages may stretch another year or more.
“We have a lengthy way to go yet,” Pat Gelsinger, head of chipmaking giant Intel, told the Wall Street Journal final week.
Apple’s still expected to report $1 of gain per share, according to analyst surveys published by Yahoo. That would amount to a jump of 50% of the alike time a year ago, off nearly $73 billion in revenue.
But larger questions still remain about the coronavirus and the potential disruptions it could cause.
Charting a path
While Apple’s short-term plans may change due to COVID-19, analysts say they’re closely watching its newest iPads, Mac computers and subscription efforts. For years, Apple’s fate has been tied to the iPhone, which typically represents about half of the company’s annual revenue. But in 2019, Apple started launching unused subscription services, including its $5 per month Apple TV Plus for movies and TV, $5 monthly Apple Arcade for games and, final year, and Apple Fitness Plus workout classes for $10 per month.
Each has received positive reviews, topped by Apple TV Plus earning 35 Emmy nominations earlier this month, led by its breakout sports comedy Ted Lasso.
Apple’s subscriptions have grown to represent almost half of the company’s overall services business, adding to its already popular App Store and iTunes music and movie store businesses. “We think services trends could trend more like a recurring revenue stream with less seasonal volatility in the coming years,” analysts at Cowen wrote in a report to investors earlier this month.
The newest iPads and Mac computers are also garnering positive response. CNET Editor Scott Stein says Apple’s home-grown M1 chips are “a leap up” that are “dripping with power.” And consumers are buying so many of them that Apple said it’s struggling to preserve them in stock.
Apple said it didn’t know how lengthy it would struggle to meet demand, but it expects to be “supply-gated, not demand-gated” for the foreseeable coming. Loup Ventures analyst Gene Munster said in a blog post that he expects Apple will catch up to demand by the fall, “which leads us to believe the best days are still ahead for Mac and iPad.”
In the meantime, the larger answers about the coronavirus are still unclear. The federal government is continuing to support for vaccines, and a potentialin the coming months. “The vaccine is free, safe and effective,” President Joe Biden said in June. Apple CEO Cook’s anxiety about the coming may be a result of whether anyone’s still listening.