by Jared Levy on July 19, 2010
Apple (NASDAQ:AAPL) stock and the company’s product line are both definitely favorites of mine. If you have followed my writing any amount of time, you’ll know that the smartphone universe and the players within it have been under my microscope for almost two years now. Apple, of course, is more than a smartphone company, but its number-one product is the iPhone, so many analysts tend to put great emphasis on sales of that product. Even with strong iPhone sales, the other products do certainly play a role and we will want to see growth across the entire product line.
The iPhone 4 was released this past quarter and the bulk of the new iPads (3G and variants) sales will be included in this quarter’s earnings as well. Now that we are about three months past the iPad’s April 3 release, data on this device’s sales will also be key.
Based on anecdotal evidence and a statement from Apple, iPhone 4 was a record breaker in new product sales. Obviously there is the antenna issue with this product, but Apple is applying a band-aid in the form of a free case for everyone who bought the phone.
Even though some think Steve Jobs’ tone was almost “condescending” in his conference on Friday to address the issue, the equity market made its own decision and the stock actually held its ground among a sharply declining broader market. But given reports that the iPhone 4 drops twice as many calls as its predecessor, future sales are certainly a concern, as are costs to the company and a permanent solution to the issue.
Coming into its Tuesday earnings report, Apple has some serious expectations behind it. According to several sources, the consensus second-quarter earnings expectation is about $3.10 per share, up from $2.01 a year ago. Most are looking for a revenue increase of about 76.8% to $14.7 billion year over year.