iPhone 8 hints awaited in Apple third quarter earnings amid reports of delays

 
Lynsey Barber
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The iPhone 8 is expectepd from Apple in September (Source: Getty)

Apple fans and analysts are eagerly awaiting the tech giant's latest earnings for a hint of what's to come in the iPhone 8 amid suggestions of a delay.

All eyes will be on guidance as it announces third quarter earnings for the three months to the end of June on Tuesday after the bell.

Royal Bank of Canada analyst Amit Daryanani has shifted sales estimates of 5.5m back from September to December, revealed in a note to clients last week.

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"Based on incremental supply chain data points that suggest a more pronounced OLED iPhone delay, we think the flagship device may not see initial shipments until October with volume shipments not occurring until the November/December timeframe."

The hotly anticipated iPhone 8 which, is launching in the 10th anniversary year of the life-changing device, is expected to adopt an OLED display, a change from the LCD screen of previous models.

A delay has the potential to shift the sales bump of a new iphone out of the current full-year financials and into the next. Piper Jaffray analyst Michael Olson has also moved its 4.4m sales estimates for iPhones from September to December.

Daryanani said it remained positive on upgrade demand, services growth and the potential benefits of repatriating cash if President Donald Trump makes changes to the way off-shore earnings are taxed.

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Apple remains the most valuable company in the world, but some analysts have downgraded its stock. Mizuho moved from buy to neutral last month, citing "limited upside" around the upcoming product cycle. And another at Pacific Crest said Google stock was a better buy than Apple.

However, Credit Suisse remains confident in the iPhone "super cycle" and reiterated its "outperform" rating in June. "We remain convinced that the iPhone 8 product cycle will be significant in terms of driving multiyear unit growth, and we maintain our conviction on Apple's ability to introduce new higher pricing tiers with an improved mix," said analyst Kulbinder Garcha.

He also said its estimates could prove conservative when it comes calculating the cost of the iPhone. Reports suggest the new device could be priced as high as $1,400. "Given its affluent user base, a significant feature upgrade, limited price elasticity shown so far, as well as Samsung's higher pricing points of the S8 devices, we believe our ASP [average selling price] assumptions could prove conservative."

Revenue for the quarter is expected to jump to $44.9bn, up six per cent on the same time last year and earnings per share is forecast at $1.57, up 10 per cent according to Wall Street estimates. Apple posted a surprise dip in iPhone sales last quarter as people put off upgrading in anticipation of the new device.

But the numbers are expected to take a back seat to the tech giants outlook. “These numbers will not be that important. All anyone is talking about at the moment is iPhone 8, and that has nothing to do with these figures," said Edison Investment Research analyst Richard Windsor.

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