How is Apple Doing? Three Things To Watch For As The Company Checks In

Author

John Paul Titlow

October 27, 2015

It’s that time of the quarter again: The world’s most profitable technology company is about to tell investors and journalists just how much money it raked in over the last few months. In its quarterly earnings call, Apple will divulge how many iPhones it sold in the fourth quarter—and we may learn a thing or two about its other product lines as well. Here’s what to expect.

iPhone Sales Grow, But By How Much?

This last time year, Cupertino was turning heads with unusually healthy iPhone sales numbers. Sure, the iPhone always does well, but evidently the larger iPhone 6 and 6 Plus scratched an itch among smartphone-owning Apple fans. Record-breaking early sales of the iPhone 6 helped propel Apple beyond $42 billion in revenue for the fourth quarter last year—and above Wall Street’s expectations.

Analysts are expecting another insane quarter for the iPhone, albeit possibly not quite as bonkers as what we saw this time last year. If all goes as well as some analysts expect, Apple could report that it shipped between 49 million and 50 million iPhones. If it hits that 49 million mark, that would mean a 25% increase in iPhone sales from the same period last year (by contrast, Apple reported a 15% surge in iPhone sales in Q4 of last year). If it dips down to 47 million or lower, investors will not be happy.

A 25% increase in iPhone sales year-over-year would be impressive considering that the iPhone shipped a week later this year, so the fourth quarter will only include two days of new iPhone sales. This year’s iPhone 6s and 6s Plus were also much more iterative updates than the totally redesigned iPhone 6 was in 2014.

Either way, a new iPhone means a jump in the numbers for Apple. And many analysts are expecting to see Cupertino take the Wall Street equivalent of a flexing-in-the-mirror selfie. Hashtag success.

Apple Watch: Will Tim Cook Stay Quiet?

The Apple Watch started shipping last spring, but the company declined to say anything about it during its last earnings call, citing concerns about the competition learning too much. Fair enough, but if the Apple shipped a jaw-dropping number of smartwatches in its first few months, the company probably wouldn’t be shy about sharing it.

For now, the Apple Watch remains lumped in with Apple’s “Other” category of products in its earning report, much like the Apple TV streaming set-top box (which may be about to finally grow out of the company “hobby” status that Steve Jobs once gave it). It will thus be up to Apple’s management to decide whether to divulge how many watches the company has sold. It’s possible that a the droves of consumers lining up to buy new iPhones at Apple retail stores also made their way to the Apple Watch display table, helping to drive sales. The September 16 arrival of Apple Watch OS 2 brought new functionality to the Apple Watch, which could help drive interest as well. If we don’t hear Tim Cook cite any specific numbers for the Apple Watch on today’s earning call, then it’s a safe assumption that Apple’s newest product category is still maturing.

Will The iPad Start Growing Again? Not Yet.

One product that hasn’t followed the iPhone’s upward trajectory is the iPad. Despite its early success, sales of Apple’s tablet has been slowing down. In the second quarter of this year, Apple sold 12.62 million iPads, a 22% drop from the year prior. In Q3 the iPad dropped even further to 10.9 million units shipped, another year-over-year decline.

Will Apple announce that the iPad is turning things around? It’s not likely. The tablet has seen its sales dip for four straight quarters, with only iterative feature updates made along the way. If we’re going to see a bump in iPad sales, it’s more likely that it will happen next quarter, after the new iPad Pro ships and people have started checking things off of their holiday shopping lists. In the meantime, anything other than a decline in iPad sales would be a pleasant surprise for investors.

 

This article was written by John Paul Titlow from Fast Company and was legally licensed through the NewsCred publisher network.


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