A good time to buy Apple?

Apple shares have not had a great 2021 thus far. At the time of writing, they have fallen 8.49% since the beginning of the year. This figure is somewhat surprising given the recent bullish sales figures of their latest flagship iPhone12. The sales of this model meant that Apple recorded a record fiscal first quarter, which ended on 26th December 2020.

Revenue during this period grew year-over-year by a staggering 21%, a figure made even more remarkable by the economic climate in which it occurred. Analysts had predicted a revenue figure of $103 Billion, Apple reported $111 Billion.

These results were fueled by record sales in several market segments, iPhone sales accounted for a staggering $66 Billion, $5 Billion more than analyst forecasts and accounting for nearly 60% of Apple’s revenue. The company also reported a healthy 24% rise in its service revenue, which equated to a total revenue figure of $15.76 Billion, once again exceeding expectations, which were $14.89 Billion. Wearables also delivered a record quarter for sales.

China has a large part to play in this success. Although increases were reported across most geographic areas, it was China that fueled much of the sales boom. Chinese consumers bought the new iPhone 12 phone in their droves. Revenue in China soared by 57% as the Chinese rushed to purchase the first iPhone model to support the latest 5G protocols.

Yet despite all this, Apple’s shares have not responded similarly.

Reasons that buying Apple may be a smart investment.

There are always risks when playing the market, yet Apple is not generally considered one of them. The tech giant topped the smartphone market last year and demand is still outstripping supply. With 5G continuing to roll out, the future seems to play into its hands. The demand that this will generate is not likely to slow too much in the near future.

Indeed, the talk on Wall Street is that Apple is planning to order 100 million units of its iPhone 12 model, a rise of 20% over the previous year. A more conservative, but still healthy, estimate from JP Morgan supply chain analyst William Yang states that he believes 90 million units may be ordered. Both figures are a substantial increase over the previous year’s estimated 76 million sales.

Then there is also talk of the iPhone 13 (or 12s depending on what source you listen to). Whilst this is not expected to be a huge upgrade on the existing model, a large percentage of Apple’s massive customer base will queue up to buy it.

Meanwhile, the new entry-level model, the 5G iPhone SE, is predicted to start rolling out sometime in the first half of 2022. This could open an untapped market in price-sensitive geographic regions, as well as those who previously balked at Apple’s pricing.

What this means for the investor is that the current slide in Apple shares is likely to be no more than a dip. That’s why now might just be the perfect time to invest, as it is extremely likely that Apple will rediscover its magic touch in the not-too-distant future.