Apple iPad, iPhone Expected to Boost Quarterly Numbers

Apple could post strong quarterly numbers thanks to an uptick in iPhone and Mac sales, according to analysts, although overall iPod sales could continue their downward trend. Those analysts believe that the iPhone is strongly positioned to take advantage of the continuing growth in the smartphone market. The strong initial sales of the iPad, including more than 500,000 units during the tablet PC's first week of general release, will also be a substantial factor when Apple announces its quarterly earnings April 20.

A combination of strong iPhone, Mac and iPad sales could help Apple post strong quarterly numbers April 20, according to analysts. That follows on the heels of reports that Apple sold more than 500,000 iPads during the tablet PC's first week of general release.

During an April 8 news conference at the company's Cupertino, Calif., headquarters, ostensibly set up to unveil the upcoming iPhone OS 4, Apple CEO Steve Jobs said that about 600,000 iBooks and 3.5 million iPad applications had been downloaded since the April 3 iPad launch.

The iPad's opening sales, coupled with strong growth for other products, has analysts predicting a 47 percent jump in quarterly revenue, to $12 billion, according to an April 16 article in The Wall Street Journal. There is an expectation, however, that sales of the iPod will also continue to decline.

"We have raised our revenue and EPS estimates modestly, largely to account for higher-than-expected iPod ASPs, due to continued strength in iPod Touch sales," A.M. (Toni) Sacconaghi Jr., an analyst with Bernstein Research, wrote in an April 14 research note. "While several opportunities exist (including iPad sales, gaming revenues, enhanced Apple TV), we believe that the biggest opportunities remain centered around further penetration of the iPhone, including broadening distribution to other carriers and a lower priced, non-data plan iPhone offering."

Sacconaghi expects net shipments of 7.3 million iPhones for the quarter, along with sales of 3.1 million Macs. However, the analyst also predicts a 10 percent year-over-year decline in overall iPod unit sales, despite continued market demand for the iPod Touch.

Other analysts concurred that the iPhone could continue to drive Apple revenue upwards for the foreseeable future.

"Longer term, we believe the Street is underestimating the growth potential in smartphones, where Apple is uniquely positioned to gain share, thus the iPhone is likely to be a source of upside surprise for Apple over the next year," Kevin Hunt, an analyst with Hapoalim Securities, wrote in a research note quoted in the WSJ article.

Despite the impact of a global recession, Apple managed to consistently outperform financial estimates for 2009 and into 2010. Last quarter, the company announced revenue of $15.68 billion and a net quarterly profit of $3.38 billion, with sales of 3.36 million Macs, 8.7 million iPhones and 21 million iPods.