Previewing Apple's Record Quarter

In the following video, senior technology analyst Eric Bleeker and chief technology officer Jeremy Phillips discuss Apple's upcoming quarter, which will be reported after the bell on Tuesday.

Jeremy asks Eric to look into his crystal ball for what to expect for Apple's quarter. While there have been numerous signs pointing to a blowout quarter such as key Apple suppliers pre-announcing strong quarters and Verizon and AT&T also revealing huge smartphone sales with a high skew toward iPhones, last week also revealed some news that could help Apple.

Eric says investors need to look at Intel's earnings. Yes, Intel supplies processors for Apple's Mac line, but that's less important than what it says about the markets Apple is moving into. Apple has seen growth exploding in Asia and other emerging markets, sales grew 727% in the Asia-Pacific region between 2005 and 2010, and profits grew by nearly 3,000%! China accounted for 16% of Apple's sales last quarter, and that number only continues to rise.

So Eric says that while Intel is also reporting processor sales that go to Apple's competitors, what's important is that the results show that growth across Asia remains heady. Not only did China's computer market grow 15% in 2011, but India grew 37% and Indonesia grew 22%. Apple's growth markets continued expanding despite broad fears that growth in those regions was slowing down.

However, this is also a double-edged sword. Apple didn't release the iPhone 4S in many important markets until the very end of last quarter. Its tumultuous iPhone 4S launch in China is still ongoing and missed last quarter. For that reason, Eric says that even if Apple comes in slightly below analyst expectations this quarter, we could be looking at a repeat of last quarter, where pent-up demand for the iPhone 4S in emerging markets means next quarter will be stronger than anyone expects.

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At the time thisarticle was published Both Eric Bleeker and Jeremy Phillips own shares of no companies listed above. The Motley Fool owns shares of Intel and Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and Intel and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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