Apple Inc.

Wearables reported 17% revenue growth year over year in the third quarter of fiscal 2020 and 27% year to date, amid lockdowns and retail store closures. According to IDC, Apple is the market leader in the wearables market, with market share of about 60% for smartwatch and 29% for earwear. AirPods demand surged in the June quarter, helped by the work-from-home policies many employers mandated and increased spending on headphones. We see continued strong demand for Apple's wearables, particularly AirPods and the Apple Watch, from both the existing Apple customer base as well as new customers. The stable outlook reflects our expectation that Apple will maintain a commitment to a minimal financial risk profile while it shrinks its balance sheet

...Better-than-expected iPhone sales year to date and the delayed iPhone launch will likely push out revenue into fiscal 2021. Apple has confirmed the delay of its flagship iPhone launch by a few weeks later than its typical new phone launch in late September (end of the fiscal year), citing supply-side constraints due to factory lockdowns and shelter-in-place restrictions during the coronavirus pandemic. According to International Data Corp. (IDC), the iPhone shipment growth rate in the June quarter outgrew global smartphone shipments, which declined 16%. The stronger results came thanks to strong reception from Apple's iPhone SE launch, despite its supply chain running at less than full capacity as the coronavirus pandemic affected China and other countries. Apple's strategy to introduce a more affordable smartphone with smaller factor form provided an attractive option for more cost-conscious consumers. Another risk to Apple's business over the near term includes the rising geopolitical...

Full Report