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Is iPhone 12 a smash hit? Apple may offer its first hint this week

While the newest iPhone launched after the close of the quarter, Apple watchers will be hanging on CEO Tim Cook's every word Thursday.

Apple iPhone 12 Pro
Apple's iPhone 12 earned positive reviews ahead of its launch last week.
James Martin/CNET

Apple's iPhone 12 is winning praise for its new design, strengthened screen and better cameras. Now we're about to learn if that's enough to sell a phone that starts at $799 in the middle of a global pandemic and economic catastrophe.

On Thursday, Apple is due to report results for its fiscal fourth quarter, and Wall Street analysts on average expect it to tally 71 cents per share in profits on about $64.2 billion in sales, according to surveys published by Yahoo Finance. That's below the 76 cents per share it pulled in a year ago, which is likely due in part to the delayed launch of the iPhone 12. That handset landed on store shelves Oct. 23, "a few weeks" after Apple's three-month reporting window ending in late September.

Read more: iPhone 12 takes us a step closer to Apple's portless future

Now playing: Watch this: Our in-depth review of the iPhone 12 and 12 Pro

What that all means for most of us is that no matter what results Apple reports for the calmer sales period between July and September -- before the iPhone launch -- investors will instead be looking for any verbal cues that indicate how the first few days of sales actually went.  

Critically, it's already won praise. Reviewers like CNET's Patrick Holland called the iPhone 12 "one of our highest-rated phones of all time," and famed TF International Securities analyst Ming-Chi Kuo estimated 2x higher preorder sales than for last year's model.

Whatever Apple reports will likely be seen as a bellwether across the tech industry, which has struggled to keep sales and manufacturing steady as COVID-19 anxiety ripped through warehouses, slowed shipping and put people out of work. Nearly 44 million people have been infected by the virus since it was first detected late last year, and more than 1.1 million people have died. Efforts to contain the pandemic through social distancing, quarantines and other health protocols have helped touch off an economic crisis that's put millions of people around the world out of work.


A key selling point of the new iPhone 12 is its 5G wireless connection.


Now, as the holiday season approaches, families aren't just weighing whether they can safely come together to celebrate. They're also anxious about their budgets, as economists warn of more economic roller coasters ahead.

That all makes selling a new gadget, particularly a new iPhone with a hefty entry price, a hard proposition. Apple's not alone, either. Samsung released its $999 Galaxy Note 20 5G in August, and both Sony and Microsoft will start selling their new PlayStation 5 and Xbox Series X video game consoles that go as high as $499 each.

When it comes to Apple, though, analysts are still talking of the holiday shopping season as a likely major one for the iPhone this year.

"We believe this will translate into an unprecedented upgrade cycle for Cook & Co," Wedbush analyst Daniel Ives wrote in a message to investors Tuesday.

Searching for clues

With the iPhone 12's sales left out of Apple's financial report Thursday, industry watchers will likely listen extra carefully to CEO Tim Cook as he discusses the company's results on the after-hours conference call with analysts. And though he's known for keeping information close to the chest as one of Apple's chief secret-keepers, he and his lieutenants do occasionally make news too.

In a July conference call, Apple's executives took the unusual step of confirming a new iPhone was planned for the fall and warning it would be delayed by "several weeks" when compared to last year's launch.

Apple was also one of the first companies to warn about the impact of the coronavirus on its business. It told investors about slowed sales and manufacturing in China in February, a month before the World Health Organization declared the coronavirus a pandemic and lockdowns began in the US.

iPhone 12 Pro

Analysts expect the iPhone 12 to kick off a "super cycle" of upgrades, despite the pandemic.

Patrick Holland/CNET

On Thursday, it's a safe bet he'll likely answer more questions about the impact the coronavirus may have, now that cases are rising around the world and doctors are warning of a tough winter.

The question now before Wall Street is whether people will be reaching for iPads and iPhones to help them get through what's likely to be a long next few months.

The good news, as much as anyone can get these days anyway, is that analysts overall believe as many as half the iPhones being used worldwide are three years old or more, making it likely they're due to be replaced by one of Apple's four iPhone 12 models. Two of the models, the $799 iPhone 12 and $999 iPhone 12 Pro, have already launched, and the entry level $699 iPhone 12 Mini and top-tier $1099 iPhone 12 Pro Max go on sale next month.

"5G speed is only one factor in a consumer's upgrade decision," Loup Ventures analyst Gene Munster said in a blog post earlier this month. "The age of the phone is another factor, and iPhone owners have been holding on to their devices longer."