The consensus forecasts from Wall Street analysts indicate that as part of Apple’s upcoming report this week, there will have been between 45 million and 55 million iPhones sold in the most recent quarter. Anything at the low end of these predictions exposes Apple’s shares to a significant sell-off. Anything well above and closer to 60 million should support a continued rise in the share price.
Investors have focused on the Apple Watch as the company’s next critical product. Sales of the smartwatch might hit 5 million in the first month, if Apple has created a product that is as good as many early press reports say. Since Tim Cook became CEO, Apple has depended almost exclusively on the iPhone for surging sales. Nothing shows that more than the quarter that ended on December 27. iPhone unit sales hit 74.4 million, which drove $51.2 billion of Apple’s quarterly total of $74.6 billion for the period. The ratio has to remain or improve.
For Apple, the stakes for strong iPhone sales remain high. Shares have risen 18% this year, and continue to be a primary engine of the Nasdaq’s rise to its record level. Apple’s shares have traded close to a peak as well, around $130 recently, which has increased its market cap to $760 billion.
Fortune reported that Apple’s success will have to be affected by strong sales from its huge Chinese partner, China Mobile Ltd. (NYSE: CHL), which is the world’s largest wireless carrier, and from Brazil sales. No one outside Apple has any real knowledge about these factors.
The last time the market become anxious about Apple’s performance, shares tumbled from $100 in September 2012 to $55 in March 2013. Tim Cook has gained enough admiration among investors that it has given him much support from both the tech and investment communities. He could get a pass should the quarter be a bit weak. He will not get one if the results come in well below expectations. Sixty million iPhone sales leaves him in a safe position, at least until the next quarter.