When Apple unveils its latest earnings report Tuesday, some analysts think the numbers may be even better than expected.
Q3 is usually Apple’s weakest quarter of the year as the iPhone sales cycle starts to come to an end. However, this week’s call may hold a number of surprises and hints about the 2018 iPhone lineup as Apple gives investors guidance on next quarter. As usual, Cult of Mac will liveblog the entire call with all the pithy analysis we can muster.
We’ll be watching for these key details in the report (and so should you).
Over $51.5 billion in revenue
During its Q2 2018 earnings call, Apple told investors it expects to bring in between $51.5 billion and $53.5 billion in revenue for the quarter. That’s up from the $44.5 billion the company made during the same quarter last year.
While iPhone sales will provide a big chunk of that revenue, Apple’s other products and services should fuel a lot of the growth. If the sales numbers are big, we could see Apple become the first $1 trillion company. The company will need a big boost in services revenue to please investors.
42 million iPhones sold
Most analysts expect iPhone sales growth to be modest for Q3 2018. Toni Sacconaghi, an analyst with Sanford C. Bernstein, predicts sales will come in around 41.8 million units sold. That would be a small bump up from the 41.03 million sold in Q3 2017.
The iPhone ASP (average selling price) is another key number investors will be looking at. Thanks to the iPhone X’s higher price tag, analysts think iPhone ASP will rise by $87 to $693.
2018 iPhone lineup details
What investors are looking forward to most on the call is Apple’s guidance for Q4 2018. Last year, the iPhone X didn’t go on sale early enough to impact Q4’s numbers. This year should be different. Traditionally, Apple launches its new iPhones a few weeks or days before the end of Q4. If Apple’s guidance for Q4 revenues comes in well above the $52.6 billion it made during Q4 2017, that should be a good sign that the 2018 iPhone lineup will launch by September.
Last year, Apple CEO Tim Cook predicted that Apple services revenue will double by the year 2020. Investors are hoping to see more money from Apple Music, the App Store, Apple Pay, iCloud and other revenue streams. The consensus seems to be that services revenue will come in around $9.21 billion. That would be a 27 percent boost from the same quarter last year. Anything over that would be a huge win for Apple.
Trade war with China
President Donald Trump originally promised Tim Cook that the iPhone wouldn’t be caught in the middle of his trade war with China, but that could change. A recent report claims that the Trump administration may slap a tariff on iPhones imported from China. Another tax could be added against China itself.
Both of those taxes could inflate the iPhone’s price tag if Apple passes the cost on to consumers. That, in turn, likely would lead to lower sales. Analysts on the call will certainly question Cook about that possibility. A boycott of American products by China would also negatively impact Apple as it tries to gain ground in its second-biggest market for iPhones.