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Tim Cook's Apple

Apple Q4 Earnings Preview: All Eyes Are On The iPhone 7 Sales

Everyone wants to know if Apple has a new blockbuster on its hands, but we may not know the full results until next quarter.

Apple Q4 Earnings Preview: All Eyes Are On The iPhone 7 Sales

[Photo: Spencer Platt/Getty Images]

Yep, it's time once again for Apple's earnings report. The company will announce its fiscal fourth quarter numbers tomorrow after market close.

The biggest metrics in Apple's world right now are sales of the new iPhone 7 and iPhone 7 Plus. We want to know how sales are going so far and whether or not the new phone might bring the return of iPhone mega-sales circa 2014 and 2015, or something close to it. The problem is, as Above Avalon analyst Neil Cybart points out, a true picture of the popularity of the new phones might be skewed downward by supply shortages just after launch in September. So we may have to wait until next quarter to get a truer picture. Apple implied in July that it expects to sell about 43 million iPhones in the September-ending quarter, Cybart notes.

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The same thing goes for the new Apple Watch, which had its own supply shortages after launch. Now that the Watch has been refocused on the fitness tracking market, more people might consider it an option. Some observers believe the Watch 2 could as much as double the year one sales of the first edition Watch, which estimates peg at between 10 million to 15 million units. However, KGI Securities analyst Ming-Chi Kuo believes the number could actually decline in the first year.

Apple will likely report very weak Mac sales, but since the company is about to announce a refresh to the line this week, nobody's likely to care.

Finally, iPad sales, which had been in serious decline, began showing signs of recovery in the past couple of quarters, possibly due to increased sales in the enterprise. We'll be watching to see if that recovery continues.

We'll have a report and some commentary on the earnings numbers and Apple's comments tomorrow.

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