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Ahead of Apple's quarterly earnings report on Tuesday, analysts agree on one thing: The latest iPhone iteration will not deliver the mega sales enjoyed by the iPhone 6 line around its launch.
"The evidence thus far suggesting that demand for iPhone 6s is not as frothy as last year is tough to ignore," Susquehanna Financial Group analyst Chris Caso wrote in a note on Thursday.
Caso, who has a positive rating on the stock and a $155 price target, has reduced his estimate for iPhone fourth-quarter sales from 79 million to 74 million, representing a year-over-year decline of 0.6 percent. That estimate is just slightly below the consensus of 75 million. Apple derives more than 60 percent of its revenue from iPhone sales, so investors watch the number of units sold closely.
The company said it sold 13 million iPhone 6s and 6s Plus devices during its first weekend of sales — 3 million more than in the same period last year — but analysts point out that this year's number includes China.
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Many also note that Apple launched its new line of smartphones a week later this year, so its fourth quarter results will include just two days of sales, versus the eight included in its fourth quarter 2014 results.
Analysts expect Apple to report earnings per share of $1.88 on revenue of $51.1 billion, according to Thomson Reuters. That is just above company guidance for the 2015 fourth quarter of $49 billion to $51.1 billion and would represent a 21 percent jump over last year.
When it comes to predicting just how much demand for the latest version of the company's new smartphones may have slowed, expectations vary widely.
"Given how much consumers use smartphones, we believe the incremental value of the newest iPhone model will continue to justify its purchase for the vast majority of iPhone buyers. However, we will be watching closely to see if consumers begin to opt for savings over new features," Pacific Crest Securities analyst Andy Hargreaves wrote in a report earlier this month.
What management says on the earnings call about expectations for the all-important December holiday quarter is likely to have more impact on the stock than the earnings numbers.
"The issue of unit demand gets pulled forward," BGC analyst Colin Gillis said in an earnings preview report on Friday. "Any weakness in iPhone sales in the December quarter may add fuel to the concern that the smartphone cycle is slowing, and drive shares of Apple lower. We see risks highly skewed to the downside."
Of course, Apple launched a slew of other new products this year, and analysts will also be watching for hints about management expectations for holiday sales. "We believe Apple Watch will be a major hit this holiday season," Drexel Hamilton analyst Brian White wrote in a note out earlier this month.
The company has refused to disclose Apple Watch shipment numbers, with CEO Tim Cook simply saying at a conference last week: "We shipped a lot the first quarter, then last quarter we shipped even more. And I can predict this quarter we will ship even more."