All eyes are on Apple as the company gets ready to announce its third quarter earnings Tuesday after the market closes. And Wall Street analysts and market watchers are predicting that Apple could beat its own guidance, signaling that the tech industry is poised for a rebound.
As Apple prepares to talk turkey on its third quarter, which ended on June 27, here are five noteworthy things to keep a look out for.
1. Record Mac sales expected: Several analysts say Apple sold a record number of Macs in the third quarter. North American Mac sales were up 16 percent in June compared to one year ago and Mac sales altogether rose about 5 percent in the third quarter, according to The NPD Group. That means Apple sold about 2.6 million Macs in the third quarter. If NPD Group's numbers are correct, Apple is teetering on a record-setting third quarter for Mac sales.
2. Apple iPhone sales will be up too: Apple's iPhone has become an icon. And the popularity of the Apple iPhone 3G S, released at the end of the third quarter, illustrates that. The Apple iPhone 3G S sold more than 1 million units in its first weekend, not a bad way to close out a quarter. That, along with Apple slashing the price on the standard iPhone 3G, should mean a strong showing for the iPhone in the third quarter. In the first two quarters, Apple reportedly sold roughly 8.1 million iPhones, and analysts expect that Apple sold about 5.3 million in just the third quarter -- a 40 percent increase over the second quarter -- showing that Apple's foray into smartphones is for real and not going anywhere.
3. Apple iPod sales could be down: If Mac sales and iPhone sales are up, something's got to give. In the third quarter, it looks like the Apple iPod, the trailblazer of portable digital music players, will take a hit. Apple sold 11 million iPods last year, according to NPD. This year, NPD expects Apple to report sales of 9.6 million. Part of the reason iPod sales are down is over-saturation of the market. It's also possible that Apple is competing with itself, offering overlapping functionality with the iPod and the iPhone. "One of these days iPod sales will decline, and maybe it will be this quarter," Andy Hargreaves, an analyst with Pacific Crest Securities, told BusinessWeek.
4. The Apple App store will be more lucrative than planned: Apple has maintained that its mobile application marketplace, the iTunes-based Apple App Store, isn't a money-making venture. But since the store launched last July, more than 1.5 billion free and paid mobile applications have been sold, roughly 500 million of those in the third quarter. Not too shabby. And with a good percentage of those applications paid for, App Store sales are sure to help Apple's bottom line.
5. Price cuts won't hurt Apple's third quarter: Apple cut prices for some MacBook Pro notebooks in the third quarter, but the lower margin won't hit earnings too hard. The demand is still there for MacBook Pro notebooks, and the price cut spurred additional sales. And record Mac sales and the release of the higher-priced the iPhone 3G S should offset some of the cash lost to MacBook price cuts.
