New iPhone: big key to Apple's future

New iPhone to appear later this year. But analysts expect sales of old iPhone to dip and supplies of new iPhone to be constrained for several months.

Carlos Barria/Reuters/File
Customers wait in line prior to the initial sales of the new iPhone 4S at Apple's retail store in downtown Shanghai in this January file photo. Apple Inc's next-generation iPhone has not even been released yet, but opportunistic sellers on China's largest e-commerce platform, Taobao, are already accepting pre-orders, complete with mock-up pictures and purported technical specifications. The hotly anticipated iPhone 5 is widely expected to be released sometime between August and October this year, although Apple itself has been tight-lipped about it.

Apple Inc. is expected to report a healthy increase in earnings and revenue for its fiscal third quarter on Tuesday, but investors are already looking ahead to the big event of the year: the launch of a new iPhone model.

WHAT TO WATCH FOR: The latest iPhone model, the 4S, was launched last year and is getting long in the tooth. Analysts expect that Apple shipments to have dipped substantially in the just-ended quarter.

Brian White at Topeka Capital Markets expects Apple to report selling 30.9 million units, while Andy Hargreaves at Pacific Crest expects it to report selling 25.4 million. In the second quarter, Apple shipped 35 million.

The trend in iPads is expected to be stronger, since Apple launched the latest model just two weeks before the start of the quarter. White expects it to have shipped 15.9 million units, which would be a record, while Hargreaves expects it to have shipped 14.3 million. That would beat the second quarter but not the holiday-fueled first quarter.

The company doesn't announce new products on its financial conference calls, but analysts are sure to probe executives for clues as to how fast the company can ramp production of the iPhone 5.

"We expect the product to be supply constrained for several months, which suggests that component supply and production capacity are likely to dictate Apple's (October to March) earnings power and the direction of its stock," Hargreaves wrote.

The iPhone 5 is expected to be able to use the fastest new wireless data networks operated by Verizon, AT&T and Sprint. There's also speculation that it could have a slightly larger screen.

Apple launched new MacBooks in the quarter, including a high-end model with a super-high-resolution screen. In the second quarter, Macs accounted for 13 percent of Apple's revenue, compared to 17 percent for iPads and 58 percent for iPhones.

The company is set to release a new version of the Mac operating system this month. This version will be called "Mountain Lion" and will cost $20.

WHY IT MATTERS: At a market capitalization of about $572 billion, Apple is the world's most valuable company, by far. It makes up 4.4 percent of the value of the S&P 500 index and 12.6 percent of the Nasdaq composite index, as of June. The iPhone, released in 2007, essentially created the mass smartphone market.

WHAT'S EXPECTED: Analysts expect earnings of $10.37 per share on revenue of $37.5 billion, according to FactSet.

Apple has said it expects earnings of $8.68 per share and revenue of $34 billion, but it has a tradition of lowballing forecasts.

LAST YEAR'S QUARTER: In the same period a year ago, Apple earned $7.79 per share on $28.6 billion in revenue.

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