For the benefit of Apple's third quarter, everything revolves around the next iPhone

As for Apple's third quarter earnings Tuesday, the only thing that really matters is what it says about the next iPhone.

And while Apple does not give much – or really, no – details about its upcoming iPhone when making income appeals, it gives little clues. CEO Tim Cook will sometimes make comments as Apple expects an "exciting fall", but it's as talkative as it gets. Still, financial analysts are reading tea leaves to estimate the number of devices that Apple expects to be able to sell in its September quarter, which typically includes the first or two weeks of new iPhone sales.

This means that when it comes to the third fiscal quarter, which covers the three months ending in June, Apple gets a pass. It is the smallest of Apple in terms of contribution to annual sales. By the time the period ends in June, Apple's new iPhones are already nine months old. Example: The iPhone 8 and the iPhone 8 Plus were introduced in September 2017.

During the quarter, people are no longer in line at the Apple Store but expect rather that the next phones arrive on the market, probably in September. Last year, the iPhone X came out in November, a few months later than usual. Apple customers want the latest and the best – or to buy older models at lower prices. History has shown that whenever Apple introduces a new iPhone, it reduces the prices of its previous models.

The third fiscal quarter results "should not mean much to investors, except for iPhone units, gross margins or services." Says Toni Sacconaghi, an analyst at Sanford C. Bernstein. Investors' attention has shifted to the demand of the iPhone in FY19 with the next generation of iPhones. "

Apple declined to comment before its earnings report.

iPhone Moneymaker

Cook has made efforts to expand beyond the iPhone, but Apple still gets most of its money from the popular smartphone.In the second quarter, it sold $ 52.2 million. 39, iPhones, which accounted for 62% of sales. (Services, Macs and iPads and "other products" like AirPods contributed to the rest of the turnover.) But Apple surprised almost everyone this quarter by announcing solid results despite that the slowdown in smartphone demand has finally caught up with the Cupertino, Calif.

At the time, Apple was noticing that its iPhone X, which hit stores on Nov. 3, was the best – selling device every week of the quarter, even though it 's only the same. was the most expensive phone ever made by Apple. The 5.8-inch device starts at $ 999, $ 300 more than the iPhone 8 4.7-inch and $ 200 more than the 5.5-inch 5.5 iPhone .

With the iPhone X, Apple redesigned its popular smartphone for the first time in three years, getting rid of the home button to expand the touch screen and add a new FaceID technology. Analysts have predicted this would lead to a "supercycle" that would spur the excitement in the smartphone market, which saw global demand slide as people keep their devices longer. For the third quarter, which Apple will report Tuesday after the market closes, analysts estimate that the company has sold 41.8 million iPhones, according to Sacconaghi. Compared to 41.03 million in the same quarter in 2017.

Sales are expected to reach $ 52.3 billion, up 15% over last year, according to Yahoo Finance, and move from 1 , $ 67 last year at $ 2.18. [19659004] Apple is expected to introduce three new iPhones in September, including the possibility of a significantly larger model than the iPhone X and another that is significantly cheaper.

But smartphones are no longer a fast growing bus for Apple. "The iPhone is becoming a stable business," noted Gene Munster of Loup Ventures, instead of the company's main growth engine. Unit sales will not skyrocket each quarter as in the past, but they will be stable at around 5 percent, he says, as consumers replace phones regularly.

Because so many people have iPhones, the Apple Services business – which includes the App Store, Apple Music and iCloud – is where we'll probably see a big leap. In the second quarter, Apple's service revenues climbed 31 percent to $ 9.19 billion while iPhone sales grew only 2.8 percent

" We have the best pipeline of products and services ". call May 1st.

Tuesday can give us the first glimpse of the quality of this pipeline.

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