Analysts expect strong 1st quarter on Mac, iPhone sales, but possible tablet steals spotlight

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Earnings Preview: Mac, iPhone sales bolster Apple

SEATTLE — Apple Inc. reports earnings for the fiscal first quarter Monday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Cupertino, Calif.-based Apple started selling its popular iPhone in two key markets during the quarter — China, the world’s most populous nation, and South Korea, a hotbed of gadget innovation.

Apple bought a streaming music service called Lala.com during the quarter. Lala, a Silicon Valley startup, has developed — but not yet made public — an application that lets people stream songs an unlimited number of times to their iPhones for 10 cents per track, far less than they would pay to buy a higher-quality copy of the song.

Apple and Nokia, the world’s largest cell phone maker, sued each other for patent infringement during the three-month period.

Apple also touched up its iMac desktop computer line and released a new touch-sensitive wireless mouse in time for the holidays.

Overshadowing all these events, however, was rampant speculation that Apple would release a tablet-style computer in time for the holiday shopping season. Apple did not, but analysts believe such a device, which would fit somewhere between an iPhone and a laptop computer, is still on its way.

BY THE NUMBERS: In October Apple said it expected to earn $1.70 to $1.78 per share on $11.3 billion to $11.6 billion in revenue. Apple tends to be conservative in its guidance, and analysts surveyed by Thomson Reuters expect the company to post a profit of $2.07 per share on revenue of $12.1 billion.

ANALYST TAKE: Caris & Co. analyst Robert Cihra wrote in a note to investors on Jan. 14 that Apple’s results may be even better than Wall Street is expecting due to strong Mac computer and iPhone sales. And unlike Windows PC makers, many of whom slashed prices to compete for consumers’ closely watched dollars, Apple was relatively free from pressure to cut prices, Cihra wrote.

Tavis McCourt of Morgan Keegan wrote in a Jan. 13 research note that he believes Apple sold fewer iPhones in China than expected.

STOCK PERFORMANCE: Apple’s stock rose 15 percent in the quarter to close at $209.04 on Dec. 24.

WHAT’S AHEAD: Apple is hosting a media event in San Francisco on Wednesday that many expect will mark the unveiling of the much-anticipated tablet.