Apple will give investors their first insight into iPhone 8 sales, right on the eve of the iPhone X launch.
The final Apple earnings call of 2017 takes place Thursday, November 2, at 2 p.m. Pacific. Apple’s fourth fiscal quarter ended right after the iPhone 8 started shipping. The results aren’t expected to be record-breaking, but this first glimpse should give us a better idea of how monstrous Apple’s holiday season will be.
This is what to watch for:
Usually, Apple gets a big boost this quarter from new iPhone sales. This year, however, the iPhone 8 went on sale a bit later and demand wasn’t as great because of the iPhone X.
Apple is still expecting to see an increase in revenues, though, estimating it will bring in between $49 billion to $52 billion. Most analysts on Wall Street predict revenues will meet Apple’s estimates, but few think Cupertino will knock it out of the park. Last year, Apple brought in $46.85 billion in revenue, so anything above that will be a good sign. On average, analysts expect Apple to bring in about $9.7 billion worth of profit.
iPhone 8 sales
Tim Cook said he couldn’t be happier with iPhone 8 sales on launch day, but other analysts aren’t as positive. Some reports indicate the iPhone 7 might have outsold the iPhone 8 a few days after launch. Other, more reliable, experts claim those reports are overblown and that iPhone 8 is fairing better than expected.
Analysts predict Apple sold 61 million iPhones during the quarter, but we might not learn what percentage of that total consisted of iPhone 7. Hopefully, we get some actual iPhone 8 sales numbers during the call to see how well it’s doing.
Q1 2018 Estimates
The biggest piece of info investors will be eager to get is Apple’s estimate of how much revenue it expects next quarter. Q1 is always Apple’s biggest quarter, thanks to new iPhones and the holiday shopping season. This year’s Q1 could be a record-breaker thanks to the iPhone X and the upcoming HomePod smart speaker and iMac Pro.
Analysts expect Apple to project Q1 revenues around $85 billion. That would be a small jump from the $78.4 billion it brought in during Q1 2017, but it would also signify that Apple is confident it can boost iPhone X supply to keep units shipping out quickly into customers’ hands.
Apple’s growth in China
China sales had been sluggish for Apple in recent quarters, but the company’s last earnings report showed a return to growth. High demand for the iPhone 8 could give revenues a boost in mainland China. Some investors are worried, though, that many customers are waiting for the iPhone X and growth won’t be as strong as hoped for quite yet.
Money generated from the App Store, iTunes, Apple Music, iCloud and other services have become an important part of Apple’s business over the last few quarters. The company expects services to be the size of a Fortune 100 company by 2020, but it’s going to need more users to get there. Analysts expect Apple will have no problem making more revenue from services this quarter — the only question is how much will it grow?
iPad sales were surprisingly strong last quarter, thanks to lower prices on the cheapest model and interest in the iPad Pro line. Meanwhile, Mac sales continued to perform well relative to the rest of the PC industry. Most analysts think iPad sales should continue to perform well throughout the rest of 2017, which should line up Q1 2018 to be Apple’s biggest quarter ever.