Analysts: Apple's iPhone sales likely to top last year - but by how much?

Apple (NASDAQ:AAPL) reports its fiscal fourth-quarter results after the market closes today, and all eyes will be on how the company's iPhone business is doing, and to a lesser extent, how well its iPad tablet sales have held up.

The quarter includes only eight days of sales for the iPhone 5s and 5c, its two new models, but expectations are high for the company. In the year-ago quarter, Apple sold 26.9 million iPhones, and in its fiscal third quarter the company sold 31.2 million. According to Fortune's Apple 2.0 blog, an average of 48 professional and independent analysts expect Apple to have sold 33.4 million iPhones this time around.

Apple said it sold a record 9 million units of the iPhone 5s and lower-priced iPhone 5c during the new models' debut weekend, far higher than 5 million iPhone 5 units Apple sold during that gadget's debut weekend in 2012. Apple did not provide a breakdown of sales between the two new models. In conjunction with the 5s and 5c sales figure, Apple also said it expects revenue and gross margins for its fiscal fourth quarter to be at the high range of its expectations: $34 billion to $37 billion in revenue and a margin of 36 percent to 37 percent.

According to the Wall Street Journal, analysts on average expect Apple to report earnings of $7.94 a share with $36.9 billion in sales for the quarter, which would translate to around $7.2 billion of profit, with a gross margin of 36.9 percent. Other analysts think the revenue figure will be slightly lower, at $36.82 billion.

Something analysts will likely ask Apple about during the company's earnings conference call is how well the 5c is selling compared to the more expensive 5s. Apple has reportedly told the two companies that assemble its iPhones to cut orders for its lower-priced iPhone 5c, according to multiple reports, which could signal weaker-than-expected demand for the device compared to the iPhone 5s.

Apple declined to comment on the reports from earlier this month. Apple is selling the 16 GB iPhone 5c for $99 when coupled with a two-year contract, but the phones goes for $549 without a contract. Many analysts had expected the iPhone 5c to retail for $400 to $500 on an unsubsidized basis, and were shocked that the ultimate price was not lower, especially because of the opportunity to go after consumers in emerging markets who cannot afford higher-priced phones. Other analysts say the concerns are overblown and that the 5s will deliver more profits and higher margins to Apple.

"Media reports of 5c production cuts are misleading, in our view, given what we think has been strengthening overall 5s/5c production with 5s vectors continuing to strengthen even real time," Timothy Arcuri, an analyst at Cowen & Co, wrote in a research note, according to Reuters.

"We never had an objective to sell a low-cost phone," Apple CEO Tim Cook told Bloomberg BusinessWeek last month in explaining the company's strategy. "Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost."

Also in focus will be Apple's relationship with China Mobile. The operator, China's largest, does not sell the iPhone, and many expected that the carrier would ink a deal with Apple this year.

Also in focus will be Apple's tablet business. In July, Apple reported that in its fiscal third quarter it sold a total of 14.6 million iPads. In the year-prior quarter, Apple shipped 17 million iPads. Apple is expected to have sold around 13.9 million iPads in its most recent quarter, according to Fortune. Apple last week unveiled its newest iPad, the iPad Air, and a new iPad mini with a Retina display; both gadgets run Apple's more powerful A7 chipset.

For more:
- see this WSJ article (sub. req.)
- see this AllThingsD article 
- see this Reuters article
- see this CNET article
- see this Time article 
- see this Fortune article

Special Report: Wireless in the third quarter of 2013

Related Articles:
Reports: Apple makes cut in iPhone 5c orders
Apple sells 9M new iPhone 5s, 5c models in debut weekend
Apple's iPhone 5s goes on sale, with gold version reportedly in tight supply
Apple's Cook on iPhone 5c price: 'We never had an objective to sell a low-cost phone'
Reports indicate Apple's iPhone 5s will be in short supply on Friday
Apple stays mum on iPhone 5c pre-order figures ahead of launch

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