NetGuide NZ - Apple earnings: Are investors worrying?

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Apple earnings: Are investors worrying?

Tim Cook will this morning offer the clearest indication as to whether Apple's low-cost iPhone 5C model has either missed the mark or hit the jackpot.

As the tech industry awaits Cupertino's fourth quarter results, set for later this morning, its CEO has the first official chance to banish rumours of a failing new product range.

Plagued with rising speculation that the number of 5C handsets being shipped have been halved due to poor sales, Cook will set the record straight in a conference call to investors, while also offering a more detailed insight into the performance of the company's flagship device, the iPhone 5S.

Yet despite such rumours, key emphasis on the word rumours, Cook will be buoyed by the tech giant selling a record-breaking nine million of both handsets just three days after its launch on September 20.

Coupled with over 200 million devices now running the revamped iOS 7 software, Cook was well-placed to declare the launch the company's best yet last month.

“This is our best iPhone launch yet―more than nine million new iPhones sold―a new record for first weekend sales,” Cook said at the time.

“The demand for the new iPhones has been incredible, and while we’ve sold out of our initial supply of iPhone 5s, stores continue to receive new iPhone shipments regularly."

Speaking ahead of the results, Gartner analyst Carolina Milanesi claims the company can ill afford a poor showing, such is Cupertino's reliance on strong smartphone sales.

"They are extraordinarily dependent on that product," Milanesi said.

Those quick to dismiss the iPhone 5C in particular were tech analyst firm Bernstein, who documented their worries in a statement to investors earlier this week.

"We worry that Apple's inability/unwillingness to come out with a low-priced offering for emerging markets nearly ensures that the company will continue to be an overall share loser in the smartphone market until it chooses to address the low end," analyst Toni Sacconaghi wrote.

"In essence, Apple continues to risk being relegated to a high-end niche player."

But with some sections of the media claiming Cupertino will reports sales between 33 million to 36 million iPhones during the quarter, is it too early to write off Apple's latest release?

"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," wrote Timothy Arcuri, analyst, Cowen & Co, in a research note.

Echoing Arcuri's claims, Yankee Group analyst Carl Howe thinks the industry should wait before throwing the products under the bus, so to speak.

"The truth is we don't know," Howe said. "They don't break out sales for different models, so it's a guessing game.

"The 5C buyer isn't the sort of buyer who stands in line. Once the 5S frenzy has died down, the 5C will be more popular."

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