Technologies

Apple may reveal its biggest quarter ever after iPhone 13, AirPods 3 and MacBook Pro launches

A pandemic, economic uncertainty and an international chip shortage apparently haven’t slowed the tech giant.

Ever since Apple‘s value blew past a trillion dollars a few years ago, analysts and tech industry experts alike have frequently wondered aloud, “How much larger can it get?”

We’ll get an answer Thursday, when Apple announces its fiscal first-quarter sales and tells us how many iPhones, Macs and other products it sold during the holiday shopping season. Apple has built a lot of its business around this period, timing product launches — like those of its well-reviewed iPhone 13, its revamped MacBook Pro laptops, its latest iPads, AirPods 3 and the Apple Watch Series 7 — to maximize sales as people hunt for gifts for family and friends. After the quarter’s December close, investors pushed Apple’s shares so high that the company’s value topped $3 trillion for the first time, despite ongoing supply shortages for chips and other technology.

On average, Wall Street analysts expect the quarter to deliver new all-time financial records of $1.88 per share in profit on $118.38 billion in revenue, according to surveys published by Yahoo Finance. Though that’s impressive, Apple isn’t expected to show as much growth as it did in the 2020 holiday shopping season. That’s when the iPhone 12, Apple’s first 5G-compatible device, helped push the company’s profit up 30%, while sales jumped more than 17%.

That wasn’t all, though. Apple has continuously said over the past year that its Mac computers and iPads were seeing record demand as well, in part thanks to the company’s highly anticipated new M1 “Apple Silicon” chips. That technology scored well among reviewers, including CNET’s, who ran tests that showed performance improvements and increased battery life. “It was zippy,” CNET’s Andrew Hoyle wrote of using the new MacBook Pro to process high-detail photos.

Now analysts are broadly expecting 2021’s holiday shopping season to mark another record for Apple.

“The performance seen by Apple in the quarter was despite an unprecedented chip shortage out of the Asia supply chain,” Wedbush analyst Daniel Ives wrote in a Monday message to investors. Despite Apple’s established position as one of the world’s most highly valued companies, Ives says he still expects to see Apple’s “renaissance of growth” continue and its shares “outperform.”

An Apple spokesman declined to comment ahead of the company’s earnings report.

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No matter what Apple says in its financial report Thursday, the results will be seen as a bellwether across the tech industry, and potentially beyond. But that report may prove an outlier as other companies struggle with supply and worker shortages, disappointing already dour Wall Street investors worried by further inflation, COVID-19’s continued impact on the world, and saber rattling between Russia and the US over Ukraine.

“Given resilient iPhone and Mac demand, we see Apple as a high-quality ‘flight to safety’ name to own during market volatility,” Cowen analyst Krish Sankar wrote in a note to investors. He too labels Apple’s stock at “outperform.”

Apple has long operated one of the most successful supply chains, particularly as it navigated disruptions from the COVID-19 pandemic. Even so, Apple’s executives have said they believe the company has lost out on billions of dollars in sales due to silicon chip shortages and manufacturing problems amid seemingly ceaseless demand.

Rod Hall, an analyst at Goldman Sachs, said he’s “slightly cautious” about Apple’s prospects, considering tech’s continuing challenges with the global supply chain. In a note to investors, he warned that even though Apple may have been able to manage the chip shortages better than most, he’ll be closely listening to executives as they give commentary on a post-earnings conference call.

Apple has also largely escaped the scrutiny that tech giants like Alphabet (née Google) and Meta (née Facebook) have faced over how their respective advertising-heavy business models erode people’s privacy and trust in big tech.

Whatever Apple announces Thursday, it’ll come at a time when investors are questioning Big Tech’s future. Netflix shares have plunged more than 35% this year, driven in part by the company’s own predictions last week that it would add far fewer subscribers than expected in the first months of 2022. Electric-car giant Tesla’s stock, meanwhile, plummeted nearly 28% from $1,199.78 per share at the start of the year, driven in part by the company’s struggles to put out new cars.

It all comes down to the iPhone

The iPhone remains king at the Cupertino, California-based company, even as Apple fans and industry watchers dissect each of the company’s new product lines and business moves.

Last year, the iPhone represented 52% of the company’s $365 billion in revenue, a slight increase from the 50% it represented in 2020 and a slight decrease from the 54% in 2019. That’s part of Apple’s seemingly endless conundrum: Its position as one of the largest companies ever is tied to the iPhone’s success.

Apple has tried to build on that success, announcing ambitious services offerings, including the $5 per month Apple TV Plus, the $5 per month Apple Arcade and the $10 per month Apple Fitness Plus. Its other iPhone add-on-type products like the AirPods headphones and Apple Watch wearable have performed well too, analysts say.

Rumors suggest that Apple’s next big product launch will be a headset, potentially coming this year or next. Many tech executives believe that headsets from Apple, as well as those from Microsoft, Meta, Sony, Google and Magic Leap, could represent the next step in computing beyond the phone. And many companies have already begun preparing.

Over the past year, tech executives from game companies to social networking giants to, yes, even Apple have begun publicly discussing a new term for the types of experiences these headsets will make possible: the metaverse. That’s a catchall description of apps and experiences people can share in connected virtual worlds like a video game.

The metaverse “is an attempt to redefine our entire relationship with the internet, from virtual communities to ownership of digital content. It snakes into gaming, cryptocurrency, NFTs, teleconferencing software and 3D scanning. It’s… a lot,” CNET’s Scott Stein wrote about what he expects from the technology this year. “A year ago, nobody even talked about the idea of a metaverse. Now it’s spread across countless news stories.”

For Apple, though, the metaverse may represent more than the next step in computing: It may finally be the product to take the financial crown from the iPhone.

But don’t expect CEO Tim Cook to spill the beans about his plans while speaking with analysts on a conference call Thursday. Those reveals are typically reserved for Apple’s splashy events, whether in person or entirely virtual, as the events have been during the pandemic.

Instead, when analysts and investors wonder how much larger Apple will get, what they’ll mean is how many more iPhones can Apple sell, as well as maybe iPads, Macs, Apple Watches, AirPods and all sorts of other tech, including the company’s (in)famous $19 polishing cloth.

“We’d expect a bullish installed base update,” Morgan Stanley analyst Katy Huberty wrote in a message to investors, citing upbeat reports from Apple throughout the past year. Though she also rates Apple’s stock at “outperform,” she’ll be listening for any other signs of how the pandemic and supply chain are affecting the company.

Technologies

Trump Maintains US‑Iran Negotiations Continue Amid Tehran’s Denials of Duplicity

President Trump insists that US‑Iran talks are ongoing despite Tehran’s denial of any negotiation plans, while warning that only a deal or total surrender will allow passage through the Strait of Hormuz. Conflicting statements from both sides have heightened uncertainty as the conflict enters its sixth month.

On Monday, President Donald Trump asserted that negotiations between the United States and Iran are still taking place, even after Tehran stated it has no intention of engaging in direct talks with Washington.

In a fiery Truth Social post, Trump labeled Iran’s leaders “unbelievably duplicitous,” claiming they are lying about ongoing peace talks “whether Iran wants to admit it or not.” He repeated his assertion that the United States completely controls the Strait of Hormuz, despite maritime traffic through the crucial route lingering at only a small fraction of pre‑conflict levels.

He wrote, “Nothing reaches Iran unless we allow it, and nothing will pass unless a deal—or total surrender—is achieved.”

Earlier that day, Iranian Foreign Ministry spokesperson Esmail Baghaei told reporters there is no imminent plan for U.S.–Iran negotiations, contradicting Trump’s earlier comment that talks would resume Monday afternoon. Baghaei added that Iran’s only current discussions are with Oman concerning the Strait of Hormuz.

The conflicting statements have heightened uncertainty over the peace‑talk process and the broader conflict, now in its sixth month.

Trump’s assertion about new negotiations came a day after he said on Truth Social that he had agreed to cancel a massive strike against Iran “subject to being able to rapidly make a DEAL.” He said in the same post that Iran and other Middle Eastern countries had asked him to hold off on that attack because “the perimeters of a deal has been agreed to.”

Trump has claimed dozens of times throughout the more‑than‑five‑month‑long war that a deal is at hand. No permanent deal has been signed, and a temporary ceasefire reached in June has fallen apart.

Trump has also repeatedly threatened to launch devastating strikes against Iran before backing off. After the latest example, oil prices on Monday fell and stocks surged.

BMI, a research unit of Fitch Solutions, said in a note Monday that a broader diplomatic understanding on reopening the Strait of Hormuz is still achievable this quarter, while raising the probability of its escalation scenario to 35% from 25%, citing mounting military, diplomatic and economic signs of rising U.S.-Iran tensions.

“Diplomatic progress is likely to be punctuated by periodic military flare-ups, while miscalculation by either side could trigger a renewed escalation,” BMI analysts wrote in a note. The firm said the key issue to watch is the future governance of the strait, as the Iran-Oman talks — potentially backed by Gulf states, China and the U.S. — point to efforts to build a post-conflict shipping framework.

Shipping risks persist even as diplomacy appears to be advancing. The United Kingdom Maritime Trade Operations Centre said it received a report of an incident 20 nautical miles (23 miles) northeast of Khasab, Oman — at the mouth of the strait — with a tanker’s master reporting an explosion in close proximity to the vessel at about 20:37 UTC Sunday (4:37 pm ET). The vessel and crew were safe and authorities are investigating, UKMTO said, advising ships to transit with caution.

The proposal Trump announced over the weekend calls for the U.S. and Iran to return to negotiations and continue ironing out some of the thorny issues that had derailed diplomatic efforts, according to The Associated Press, citing a regional official involved in the mediation efforts.

The official said the proposal also includes a reopening of the Hormuz Strait and halting attacks across the region, including by Iranian-backed militias in Iraq on the Arab Gulf countries and Jordan.

The U.S., for its part, will end its naval blockade on Iran and allow Tehran to export its oil, the official said, adding that no deal has been reached, although the mediation efforts remained underway.

Trump’s weekend reversal has lowered the temperature after days of escalating attacks across the Gulf. Kuwait said Saturday that Iranian forces launched a wave of drones within its airspace, with its military destroying multiple aircraft after Iran targeted critical infrastructure in the country’s north.

A parallel track with Muscat is also advancing. Iranian diplomats said Tehran was close to reaching a new arrangement with Oman to manage shipping through the Strait of Hormuz, a deal critical to preventing the war from escalating further, according to the Financial Times.

Iranian officials said negotiations over future management of the Hormuz Strait with Oman, which sits on the opposite shore of the waterway, are in their final stages. The agreed shipping route would be different from those used before, according to Iran’s Foreign Ministry spokesperson, Baghaei, adding that the new route was separate from the issue of the strait’s reopening or continued closure.

Technologies

Oil Prices Slide as Trump Halts Planned Iran Strike

Oil prices dropped after Trump cancelled a planned strike on Iran, with WTI down about 5% and Brent near 5% lower. He said the move followed requests from Tehran and regional allies for a pause while a deal shaping the Strait of Hormuz and Iran’s nuclear program is negotiated.

Oil prices fell on Monday after President Donald Trump announced he had cancelled a planned strike on Iran. WTI futures dropped roughly 5% to $80.34 a barrel, while Brent slipped about 4.7% to $83.77 a barrel.

Trump said early Sunday he called off the strike after Iran and several Middle Eastern nations asked him to hold off, noting that the outlines of a deal had been agreed upon. He added that the prospective accord would entail the immediate, full opening of the Strait of Hormuz and an end to Iran’s nuclear ambitions, according to his Truth Social post.

The president had been considering another round of strikes as diplomatic hopes waned since the conflict began on February 28. He said the U.S. and Iran would meet for talks on Monday, but Iran denied any scheduled negotiations with Washington, citing PressTV. Iran’s foreign‑ministry spokesperson Esmaeil Baghaei clarified that Tehran was only discussing shipping routes through the Strait of Hormuz with Oman. In a follow‑up Truth Social message, Trump insisted that, regardless of Iran’s acknowledgment, the United States is indeed discussing a solution to a long‑standing problem created by Iran.

Technologies

Oil Prices Drop as Trump Cancels Planned Attack on Iran

Oil prices fell sharply after President Trump announced the cancellation of a planned strike on Iran, citing a new deal that would open the Hormuz Strait and end Iran’s nuclear threat.

Oil prices fell sharply on Monday after President Donald Trump announced that he had called off a planned strike on Iran.

West Texas Intermediate futures, the U.S. benchmark, slipped roughly 5% to close at $80.34 per barrel, while Brent crude, the international benchmark, declined 4.7% to settle at $83.77 a barrel.

Trump made the announcement early Sunday, saying he had canceled the strike following requests from Tehran and other Middle Eastern countries.

In a Truth Social post, he wrote: “We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to.”

The president indicated that the proposed agreement would include the immediate, complete, and total opening of the Hormuz Strait, as well as an end to Iran’s nuclear threat.

Trump had been weighing additional strikes amid diminishing prospects for a diplomatic resolution to the conflict that began on Feb. 28. He stated that the U.S. and Iran would hold negotiations on Monday.

Tehran denied that talks were planned with Washington, according to state news outlet PressTV.

Iran’s Foreign Ministry spokesman Esmaeil Baghaei said Tehran was only holding talks with Oman regarding the routes ships can use through the Strait of Hormuz.

In a subsequent Truth Social post, Trump added that whether “Iran wants to admit it or not, we are, in fact, talking of a solution to a problem that they have caused for decades.”