Three Highlights Hidden in Apple's Q3 Performance

Wednesday, 30 August 2023, 15:21 HKT/SGT

HONG KONG, Aug 30, 2023 - (ACN Newswire) - Earlier this month, Apple announced its 2023FY third quarter results. Despite the slight decline in total revenue, combined with latest industry analysis, there are still three highlights worth noting: the strong demand in the Chinese market, the huge potential of iPhone 15 and the boost from wearable devices.

Strong demand in the Chinese market
Currently, the top five markets for the iPhone are China, the US, Japan, the UK and India. iPhone sales in emerging markets rose year-over-year, with double-digit growth overall, while Apple's Chinese market has changed from a 3% decline to an 8% growth year-over-year.

In addition, many third-party institutions released relevant research reports followed by Apple's results. According to TechInsights' latest research report, China surpassed the US being the largest single market for iPhone for the first time, indicating the strong consumer demand in the Greater China region.

The huge potential of iPhone 15
Apple's average selling price (ASP) hit a record high in the quarter, driven by higher sales of the iPhone 14 series of Pro models. This lays a good foundation for future iPhone 15 sales. The iPhone 15 is expected to be equipped with a new 3nm chip and type-c interface, which may cause a wave of replacements. According to The Elec citing industry sources, Apple plans to increase iPhone production by 3.2 million units this year.

iPhone 15 will also be manufactured by Foxconn, Luxshare and Pegatron. According to Wedbush Securities analyst Dan Ives, recent assessments of the supply chain in Asia indicate results that future iPhone revenue may exceed current expectations. Ives attributes this positive outlook to a "clear uptick" increase in demand in Greater China, coupled with higher average selling prices. With abundant supply and the highly anticipated release of the iPhone 15 in September, Apple is poised for a favorable outlook that instils investor confidence.

In addition, according to the analysis of well-known electronics analyst Ming-Chi Kuo, Apple's 2024 iPhone shipment target is 250 million, which is greater than Samsung's 220 million shipment target, which means that Apple is expected to earn the world's largest smartphone shipment in 2024.

R&D expenses have witnessed an almost 10% year-on-year increase, as revealed in a Reuters interview with Apple's CEO Tim Cook. The majority of increased investment has been allocated towards the development of AI technology. Anticipated to have a profound impact across Apple's product line, the technological advancement could serve as a compelling reason for consumers to consider purchasing the new iPhone 15, set to be released later this year.

Wearable devices could give its revenue an additional boost
This time, Apple's wearable business and service business have both achieved growth, becoming a bright spot in performance. In terms of new products, Apple may dig into the potential of health monitoring on the follow-up model of AirPods. Equipped with new sensors, the next-gen AirPods may not only support body temperature measurement, but also is expected to bring hearing aids.

At the same time, rumors said that Apple is developing a special edition watch for the 10th anniversary of the launch of the Apple Watch next year. It might include a thin and light body and a new magnetic suction strap buckle, etc., which are expected to bring continuous high-speed growth to wearable devices. The foundries of Apple Watch are mainly Luxshare Precision and Foxconn. Regarding the headset supply chain, it is currently known that Luxshare Precision, Yangming Optical, and Foxconn's GIS have been selected, and Luxshare Precision will be responsible for the final assembly.

During the conference call after the results, Tim Cook mentioned that the revolutionary Apple Vision Pro is the most advanced personal electronic device ever created and is expected to be sent to customers' hands early next year.

Earlier market reports indicate that Luxshare Precision has successfully secured contract manufacturing orders for three models of the iPhone 15 series. This marks the first time that Luxshare Precision has obtained contract manufacturing orders for three models ahead of the annual release of the new iPhone, notably including the iPhone 15 Ultra. The iPhone 15 Ultra is a new high-end model to be introduced this year, and securing the iPhone 15 Ultra order further confirms Luxshare Precision's manufacturing capabilities being well recognized by Apple.

It is worth mentioning that it is said the iPhone 15 series will be equipped with a rear camera lens featuring a 48-megapixel resolution. Cowell, a subsidiary of Luxshare Precision, is one of the major suppliers providing camera modules.

2023 has been a rewarding year for Apple investors as the stock has soared over 40% during the past seven months, driven by the resilience of the company's iPhone sales. It is rare to see a company still appear to be non-affected by the poor global economic conditions and even grow stronger and stronger. The comprehensive upgrades of the iPhone 15 are also expected to bring certain benefits to the manufacturers involved in the iPhone supply chain.

Topic: Press release summary Sectors: Electronics
https://www.acnnewswire.com
From the Asia Corporate News Network