We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Apple (AAPL) Watch and Services Drive Q2 Earnings?
Read MoreHide Full Article
Apple’s (AAPL - Free Report) second-quarter fiscal 2018 results, scheduled to be released on May 1, are likely to be hurt by dwindling iPhone demand.
However, the company’s expanding ecosystem and diversified product portfolio that include offerings like Apple Pay, Apple Watch, Apple Music and Apple TV are expected to lend solid support this quarter as well.
Click here to know how the company’s overall Q2 performance is likely to be.
Robust Performance of Wearables
Evidently, in the last reported quarter, Apple’s Other Product segment, which includes Apple TV, Apple Watch, Beats headphones, iPod touch and other accessories, witnessed a 36% increase year over year, the highest among all its segments. In fact, the segment recorded a new all-time high with revenues of more than $5 billion for the first time in a quarter.
Total revenues from wearables increased almost 70% year over year. Notably, it was the second largest contributor to Apple’s revenue growth after the iPhone.
Per NPD’s latest Worldwide Quarterly Wearable Device Tracker report, Apple was the leading player in the wearables market in 2017, courtesy of Apple Watch.
Moreover, the growing popularity of Apple Watch among teenagers is evident from the recently released Piper Jaffray’s Taking Stock with Teens survey.
Per the survey, Apple Watch is currently the most preferred smartwatch among teens. Reportedly, out of 20% respondents who own a smartwatch, 15% own the device, up from 12% in the fall 2017 survey. Samsung Gear stands second with merely 2% respondents.
Apple’s Services segment — comprising revenues from Internet Services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services — registered 18% improvement year over year in the last reported quarter.
Apple Music is a key driver with 48 million subscribers. In February, The Wall Street Journal reported that Apple Music's growth rate in the United States is more than double of arch rival, Spotify. Apple is also anticipated to trump Spotify by this summer, if the rate is sustained.
Moreover, Apple Pay’s integration with iPhones is helping it gain popularity. In the last reported quarter, its adoption increased 50% on a year-over-year basis among merchants. Moreover, global purchase volume more than tripled year over year in the quarter.
The launch of peer-to-peer payment service, Apple Pay Cash in the United States in December, which had a “terrific start” with millions of users, is expected to be a key driver.
Long-term earnings growth rate for Lam Research, Micron and Western Digital is projected to be 17.7%, 10% and 19%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Will Apple (AAPL) Watch and Services Drive Q2 Earnings?
Apple’s (AAPL - Free Report) second-quarter fiscal 2018 results, scheduled to be released on May 1, are likely to be hurt by dwindling iPhone demand.
However, the company’s expanding ecosystem and diversified product portfolio that include offerings like Apple Pay, Apple Watch, Apple Music and Apple TV are expected to lend solid support this quarter as well.
Click here to know how the company’s overall Q2 performance is likely to be.
Robust Performance of Wearables
Evidently, in the last reported quarter, Apple’s Other Product segment, which includes Apple TV, Apple Watch, Beats headphones, iPod touch and other accessories, witnessed a 36% increase year over year, the highest among all its segments. In fact, the segment recorded a new all-time high with revenues of more than $5 billion for the first time in a quarter.
Total revenues from wearables increased almost 70% year over year. Notably, it was the second largest contributor to Apple’s revenue growth after the iPhone.
Per NPD’s latest Worldwide Quarterly Wearable Device Tracker report, Apple was the leading player in the wearables market in 2017, courtesy of Apple Watch.
Moreover, the growing popularity of Apple Watch among teenagers is evident from the recently released Piper Jaffray’s Taking Stock with Teens survey.
Per the survey, Apple Watch is currently the most preferred smartwatch among teens. Reportedly, out of 20% respondents who own a smartwatch, 15% own the device, up from 12% in the fall 2017 survey. Samsung Gear stands second with merely 2% respondents.
Apple Inc. Revenue (TTM)
Apple Inc. Revenue (TTM) | Apple Inc. Quote
Services in Top Gear
Apple’s Services segment — comprising revenues from Internet Services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services — registered 18% improvement year over year in the last reported quarter.
Apple Music is a key driver with 48 million subscribers. In February, The Wall Street Journal reported that Apple Music's growth rate in the United States is more than double of arch rival, Spotify. Apple is also anticipated to trump Spotify by this summer, if the rate is sustained.
Moreover, Apple Pay’s integration with iPhones is helping it gain popularity. In the last reported quarter, its adoption increased 50% on a year-over-year basis among merchants. Moreover, global purchase volume more than tripled year over year in the quarter.
The launch of peer-to-peer payment service, Apple Pay Cash in the United States in December, which had a “terrific start” with millions of users, is expected to be a key driver.
Zacks Rank and Stocks to Consider
Apple carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector include Lam Research Corporation (LRCX - Free Report) , Micron Technology (MU - Free Report) and Western Digital (WDC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Long-term earnings growth rate for Lam Research, Micron and Western Digital is projected to be 17.7%, 10% and 19%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>