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All Eyes Are On iPhone Sales For Apple Earnings, Not Apple Watch Sales


Later today, Apple will announce its quarterly earnings for its fiscal Q3 2015. While everybody is asking for Apple Watch sales numbers, Apple won’t break out this number. Moreover, as this is a first generation product, the Apple Watch won’t be driving the company’s earnings. Instead, the iPhone should be the star of the show, again.

According to Fortune’s consensus among analysts, Apple should report earnings of $1.88 per share on $50.4 billion in revenue. This would mean that EPS and revenue are both supposed to jump 47 percent and 34.6 percent respectively. In other words, it should be another huge growth quarter for Apple.

In particular, analysts expect Apple to report around 50 million iPhone sales, representing a huge 42 percent jump year over year. iPhone is the clear winner in Apple’s current product lineup. It’s even surprising that iPhone demand remains so strong after two incredible iPhone quarters already.

Ever since Apple stopped unveiling the new iPhone in June, Q3 has been the slowest quarter of the year for the company. Following Q1’s blockbuster earnings setting a new record when it comes to the largest corporate quarterly earnings of all time, Apple shares soared to a new all-time high at the end of February.

Shares (NASDAQ:AAPL) are now back at this same level, trading at $131.22 at the time of writing this post. There are two reasons why the stock market has been favorable with Apple — the company didn’t disappoint when it comes to Q2 earnings, and the Apple Watch could become an interesting new product line for the company.

With another solid quarter in sight, shareholders are mostly waiting for the next thing, which should be new iPhones and iPads in the Fall. Apple’s own guidance for the next quarter should boost or slow down the company’s shares on the stock market as the new iPhones should be released before the end of fiscal Q4 2015.

Yet, the Apple Watch has been criticized in the news lately. It’s funny to see how a new Apple product can go through an entire news cycle in less than a quarter — from praise to doubts to pointless bashing to revival.

Here’s the hard truth: we don’t know yet whether the Apple Watch will be a success. Apple sold less than 1.4 million iPhones during the first two quarters after its release, and it is today’s most successful electronics product. There are also many potential use cases for the Apple Watch that third-party developers and Apple have yet to discover.

Analysts have been trying to estimate Apple Watch sales, and there’s one thing for sure. There will be no way to know if these analysts are right as Apple will bury the news. CEO Tim Cook already said that Apple won’t report Apple Watch sales directly. It will be part of the “other products” category, with Beats accessories, iPods and the Apple TV.

Playing down everyone’s expectations might not be the perfect strategy for Apple as the street now expects some kind of statement from the company in the earnings release or during the earnings call — it should be a highlight of today’s earnings. We will cover all of this and more later today on TechCrunch.

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