As questions about iPhone X demand grow ever louder, Apple gets a chance to set the record straight.
Apple on Thursday will report financial results for its fiscal first quarter, which ended in December. The period is typically the company's biggest of the year because it benefits from the release of the newest iPhones and the holiday season. This time around, the first quarter will include not only three months of iPhone 8 and 8 Plus sales but also two months of the iPhone X, Apple's ultra high-end device.
The results will come after several reports that Apple is halving the production order for the iPhone X to 20 million units because of weaker-than-expected demand. The Wall Street Journal is the latest to weigh in on Apple's sales.
It's an unusual position for Apple. The holiday period is typically its strongest, and Apple has posted all-time iPhone unit sales in the first quarter for six years in a row.
Analysts forecast that Apple sold 79.2 million iPhones in the latest quarter, according to Bernstein analyst Toni Sacconaghi, versus last year's record of 78.3 million.
What's getting even more interest is how many iPhones the company will sell in the current quarter now that the excitement over the radically redesigned iPhone X has faded.
"All eyes will be on March guidance with fears running rampant on the Street that Apple will guide significantly below expectations for this upcoming quarter," GBH Insights analyst Daniel Ives said.
Analysts overall expect Apple to report first-quarter revenue of $86.75 billion, according to Yahoo Finance. For the March quarter, they expect $67.68 billion.
Apple didn't have a comment ahead of its earnings report.
It's important that Apple wows buyers with its flashy new iPhone.
iPhones account for more than two-thirds of Apple's revenue, but sales of the popular smartphone dropped for the first time last year. Consumers are keeping their devices longer as companies make fewer big modifcations to their products.
The iPhone X, which saw the first dramatic changes to the iPhone in years, is supposed to drive a supercycle of demand for Apple's smartphone. The last time the company saw such a surge was in 2014 with the launch of the iPhone 6 and 6 Plus, Apple's first bigger-screen phones.
Working against the iPhone X is its price tag -- $999, versus $699 for the iPhone 8 and $799 for the iPhone 8 Plus. Another wildcard: Many people may be opting to replace their old iPhone batteries instead of buying new phones. After news broke that Apple slows down older iPhones to offset battery issues, the company started offering battery replacements for $29 instead of the usual $79.
Apple never details individual iPhone model sales figures, but will sometimes comment about how well particular versions are selling, such as saying the Plus models have seen high demand.
Analysts do make such estimates, though. Apple likely shipped 29 million iPhone X units in the last quarter of the calendar year, according to Canalys. It was the best-selling smartphone over the holiday season, the tech research firm said.
The bigger question on everyone's mind, though, is whether iPhone sales are staying strong in the current March quarter or if they've fizzled.
Misgivings about Q2?
It typically takes a few months for Apple to make enough of its new iPhones to meet demand. Most analysts anticipated iPhone X supplies would be tight in 2018, but you can go into an Apple store today and walk out with an iPhone X. Long waits for the device disappeared mere weeks after it had launched.
Apple produced enough iPhones to meet demand so quickly one of two ways: It either improved production issues, or fewer people than expected want the iPhone X.
"We had anticipated iPhone X supply would not meet demand until well into the March quarter, leading to our expectations for a stronger than normal March quarter," Canaccord Genuity analyst T. Michael Walkley noted. But because Apple now can supply enough iPhone X units to customers, he and other analysts have lowered their forecasts for second-quarter iPhone sales.
iPhone X vs. iPhone 8 Plus photo samplesSee all photos
Analysts believe Apple will sell 62.1 million iPhones in the March quarter (compared with 50.8 million a year earlier), but they'll be closely watching the company's forecast for revenue to see if they need to adjust their estimates further.
Sacconaghi, for one, says Apple may sell up to 18 percent fewer iPhones in the period than analysts on average expect.
"Over the past several weeks, many of Apple's supply chain partners have provided updates on their businesses, and data points have generally been mixed to negative," he noted. Because of that, he said Apple may actually sell only 51 million to 57 million iPhones in the current period.
Tune back in to CNET for full coverage of Apple's quarterly earnings report.
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