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Tuesday 27 October 2015

Is the iPhone 6S a smash hit? Apple may offer clues Tuesday

Apple's iPhone 6S Plus includes new photo technology, as well as updated components and other features.CNET
Apple reports its latest quarterly results on Tuesday. But let's face it, all anyone really cares about is how the new iPhones did.
Preorders for the iPhone 6S and iPhone 6S Plus kicked off September 12, and the company's fiscal fourth quarter ended September 26. This means that Apple cannot offer a full quarter's worth of results Tuesday and that industry watchers are instead anxiously awaiting the sales forecast for the current quarter.
Apple doesn't provide estimates for its iPhone sales, but it's easy to draw conclusions from its revenue forecast because smartphones now represent about two-thirds of its sales. Those numbers and potentially a few candid comments from Apple's executives could offer up some clues.
The hints will indicate how well the new iPhones are expected to sell in the critical holiday shopping quarter. More importantly, they will help answer the question of whether the Cupertino, California, company and its iPhones have lost a bit of their swagger as consumer enthusiasm for smartphones cools.
The worry is Apple won't sell as many smartphones as it did the year before. That fear isn't unfounded. The entire smartphone market is slowing, and China, a key market for the company, has faced volatility in recent months. One-time highfliers Samsung and HTC have struggled, and it's unclear whether Apple will get dragged down with them.
Apple is expected to sell 48.7 million iPhones in its fiscal fourth quarter,according to a poll by Fortune.
"The recent 6S launch is shaping up to be nothing short of a success, but Apple is used to smartphone market conquests, and the 6S line is falling short(er than the iPhone 6)," Argus Insights CEO John Feland said Friday in ablog post.
Apple declined to comment ahead of its results.
The iPhone has been Apple's biggest moneymaker for years, but it has become even more important since last year's introduction of the iPhone 6and 6 Plus, Apple's first big-screen smartphones. Those devices have become Apple's best-selling products of all time, and they helped Apple report the highest quarterly profit of any public company -- ever -- in the quarter that ended last December. In those three months, Apple sold a record 74.5 million iPhones, 46 percent more than a year earlier.
When Apple made its fiscal fourth-quarter revenue forecast in July, though, the number wasn't quite as strong as analysts had anticipated. It didn't help that iPhone sales also disappointed in its third quarter.

Eyes on China

One of the biggest worries for Apple is the slowdown in China, the world's largest iPhone market. A stock market crash in China and concerns about a slowdown in consumer spending have left Apple vulnerable.
"China has reached saturation -- its phone market is essentially driven by replacement, with fewer first-time buyers," tech research firm Gartner said in August.
Much of the mobile industry's growth in the future will come from developing markets like India, where it's harder for people to afford pricey iPhones.
In a rare move, CEO Tim Cook emailed CNBC host Jim Cramer in August to say that despite concerns, Apple had "continued to experience strong growth for our business in China through July and August." He added that growth in iPhone activations had "actually accelerated over the past few weeks" and that Apple's App Store posted its best performance of the year in China during the two weeks before his email.
Another sign that it may not be all doom and gloom: Apple revealed last month that itsold 13 million units of the new smartphones in the first three days they were available. That's up from 10 million a year ago when the previous models first hit stores. Apple benefited this time around from offering its new iPhones in China at the same time they debuted elsewhere.
"We admit that last year's iPhone success may present [a] tough...comparison for the coming quarter," Oppenheimer analyst Andrew Uerkwitz said. "However, we think this is too shortsighted a view. We believe Apple's unique advantages in ecosystem and user experience protect it from a slower smartphone market and macro concerns."
We'll find out just how protected Apple is on Tuesday.