Apple Had an Amazing 2020. For 2021, It Will All Come Down to iPhones.

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As the year drew to a close, we took a look at all 30 stocks in the Dow Jones Industrial Average, starting with the worst performers—

Boeing

and

Walgreens Boots Alliance

—and working our way up to the highest-flying stock in the benchmark—

Apple.

It has been a remarkable year for Apple and its shareholders. The world’s most valuable public company saw its market cap soar by 81%—increasing the stock’s value by almost $1 trillion. Not surprisingly, Apple was the top performer among components of the

Dow Jones Industrial Average.

Now with a market capitalization of more than $2.2 trillion, Apple (ticker: AAPL) is more than $500 billion ahead of the number-two U.S. company,

Microsoft

(MSFT).

For most of the year, investors focused on Apple’s first 5G iPhones, which finally arrived in October. The iPhone 12 lineup has received rave reviews, early sales are strong, and investors expect September 2021 fiscal-year sales of more than 200 million units.

And there were other positive developments. On the product front, Apple launched a new Apple Watch Series, a new line of over-the-ear wireless headphones called the AirPods Max, and a revamped lineup of MacBook Air and MacBook Pro laptops with ARM-based Apple-designed processors replacing the

Intel

(INTC) chips used in older models. While iPhone sales were soft for most of 2020 as consumers awaited the arrival of new models, the iPhone 11 saw stronger sales than most had expected, and the work-from-home trend triggered by the pandemic drove record sales of Mac laptops and iPads. Apple continued to see double-digit growth in services (like Apple Music and Apple TV+) and wearables (including watches and AirPods.)

The year was not without challenges. Apple is seeing growing pressure from both developers and regulators over its take from applications offered in the App Store. Also

Facebook

(FB) has been loudly attacking Apple’s plan to give consumers the right to decline to allow apps to track their activity across the web and other apps. That will hurt the ability of Facebook and others to target advertising based on consumer behavior, a move Apple considers privacy friendly, but which Facebook thinks is bad for small businesses (and their own bottom line.)

As the year drew to a close, there was a new round of speculation that Apple might enter the autonomous car market. There have been rumors about other potential new product categories for Apple, including augmented-reality glasses and tracking devices apparently called AirTags. But the biggest swing factor for Apple stock in 2021 likely boils down to iPhone 12 sales—and whether there really will be a 5G “supercycle.”

Write to Eric J. Savitz at eric.savitz@barrons.com