The iPhone 12, along with Samsung Galaxy S21 Ultra and the Huawei Mate 40 Pro, have helped drive consumer demand. The spread of the pandemic has allowed people to spend more hours than usual on their phones, helping to digitize the global economy. While the worldwide demand for semiconductors is creating some bottlenecks, profits related to phones have surged. The iPhone was the driving force behind Apple's better-than-expected revenue and earnings. Looking forward, the demand for smartphones should continue in 2021, as 5G technology gains traction.

How Did Apple Perform?

Sales of Apple's iPhone 12, its new 5G model, led to its most considerable revenue and profit ever reported by the company. Apple said that Q1 earnings increased by more than 17% year over year, driven by iPhone 12 sales. During fiscal Q1, the Apple iPhone 12 went on sale and several other similar phones, including the iPhone 12 Pro, the iPhone 12 mini, and the iPhone 12 Max.

Apple reported profits of $28.8 billion, up about 30% year over year.  Earnings per share came in at $1.68 on $111.4 billion in overall revenue. Sales increased by 21% from the $91.8 billion reported last year. Revenue production was the largest revenue produced in a single quarter ever by Apple and allowed the company to exceed $100 billion in sales for the first time. Since reporting its earnings in late January stock trading with a broker of Apple shares has outperformed. Apple's sales and profits underscore the demand created by the pandemic, the ensuing lockdown, and the tools needed to work at home. Each of Apple's businesses experienced double-digit growth in Q1. In particular, the iPhone showed strong growth, hitting $65.6 billion in sales from the $56 billion it reported last year.

Samsung Continues to Impress

Samsung introduced new smartphones that continue to impress. The Galaxy S21 Ultra is Samsung's new premium phone. It provides a sleek design while still offering the phone for less than an Ultra model before it. Ultra phones offer impressive cameras, big screens, and S Pen support, a first for the Galaxy S lineup. But the Galaxy S21 Ultra also delivers that for a lower price. The Galaxy S21 has a fast processor and lower price tag compared to last year's S20 models. After breaking out at the end of 2021, Samsung shares are consolidating near all-time highs.

Huawei Mate 40 Pro

Huawei has continued to impress and is poised to announce the release of the Mate 50 Pro, but no date has been set. In March of 2020, the company released the Mate 40 Pro, to fanfare. Despite the Huawei P30 Pro being nearly two years old, it’s still a great phone with a fantastic zoom camera, great display and class-leading battery life. To find out why they're all so great. The offering has continued to help lift Huawei shares.

Google Continues to Offer a Simpler Solution

While Google offers smartphones, the company seems to be more focused on providing plans and competing in the data business. Google Fi tries to be flexible. Their data plan centres around Google Fi, 3 GB of data. Google Fi plans include unlimited calling and texting, but the data charges can rack up quickly. If you’re a heavy data user, Google Fi can end up costing more than you’d pay for an unlimited plan with a different provider. But if you can keep your data use in check, Google Fi offers a solid national network, great international coverage, and easy sign-up.

How Has Google Performed?

While Google shares have outperformed, most of the gains have come from a very robust advertising business. The company reported better than expected financial results, which has helped buoy the stock price. Alphabet’s revenue grew 23% on an annual basis in the quarter. That’s more robust growth than last year’s Q4, which came in at 17%. The Q4 advertising revenue came to $46.20 billion, up 22% from $37.93 billion in the same quarter last year. YouTube ads, which brought in $6.89 billion in Q4, showed a 46% jump from this time last year when it earned $4.72 billion. It also saw a jump in viewers and longer time spent watching videos, likely on smartphones.

The Bottom Line

The upshot is that the smartphone business and related business have experience strong growth in the Q4. The pandemic has led to more views during lockdowns and the reliance on the smartphone to conduct business. While Apple, Samsung and Huawei have benefited from strong phone sales, Alphabet, Google's parent, has seen substantial gains in advertising related to views.