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Strong iPhone Sales Expected to Propel Apple's Results, Anticipation Surrounds the Watch

A new consumer survey suggests that the Apple Watch may be doing better with consumers than Silicon Valley pundits think.

Apple

As Apple prepares to release its June quarter results on Tuesday after markets close, analysts predict the larger-screen iPhone 6 and iPhone 6 Plus to be the gift that keeps on giving to the company’s bottom line.

Analysts estimate Apple shipped around 49 million to 50 million smartphones in its fiscal third quarter, which would represent a roughly 40 percent increase over the same time a year ago. Wall Street analysts expect Apple to report earnings of $1.80 a share on revenue of $49.26 billion, according to a Thomson Reuters’ survey of analysts.

Stanford C. Bernstein technology analyst A.M. Sacconaghi notes that some investors have been spooked by the Chinese stock market volatility — after all, it accounted for 29 percent of the company’s revenue in the March quarter. But Sacconaghi believes demand for iPhone 6 and 6 Plus remains strong, based on his conversations with Apple Chief Executive Tim Cook, and that Apple’s smartphone is gaining share from other high-end device makers.

Sacconaghi projects shipments of 48.9 million iPhones in the June quarter, compared with 35.2 million a year ago.

UBS is similarly bullish on the strength of the iPhone 6 and 6 Plus, based on the results of its consumer research. Analyst Steven Milunovich projects iPhone shipments for the quarter reached 51 million, and that the larger, bigger-ticket iPhone 6 Plus is accounting for an increasing share of sales. That’s helping to drive up the average selling price of the device.

Success of the iPhone is critically important for Apple because it contributed 70 percent of the company’s revenue in its most recent quarter.

Even though the Apple Watch is not expected to be a major factor in Apple’s results, investors will be awaiting details about the newly introduced device.

The Apple Watch is the first high-profile product to be introduced since the death of Apple co-founder Steve Jobs, and it’s considered an important barometer of whether Apple can continue to introduce commercially viable products.

Apple has been mum about sales since the Apple Watch’s April debut, and will report sales in its catch-all “other” category that includes the iPod, Apple TV and other accessories. Sacconaghi expects Apple will have sold three million smartwatches in the launch quarter, with revenue of about $1.65 billion.

Piper Jaffray offered a similar assessment of Apple Watch sales — estimating a slow start, with approximately three million of the devices sold in its first three months. Analyst Gene Munster noted that the limited initial availability of the device may have crimped sales in the quarter, but he believes the device will catch on with mainstream consumers over time.

A newly released customer satisfaction study suggests the Apple Watch may be doing better than Silicon Valley tech pundits think.

Of the 800 people who responded to the Wristly survey, 97 percent described themselves as satisfied (even delighted) with the device. That’s a stronger consumer response than the reaction to the first-generation iPad or iPhone, according to the results reported by ChangeWave Research.

Interestingly, this Apple device is getting a better reception from outside the tech world. Some 73 percent of those who identified as everyday Apple Watch wearers pronounced themselves “very satisfied” with the device — versus 43 percent of self-described app builders.

Those who participated in the survey heaped praise on the Apple Watch for its design, quality and aesthetics — but indicated Apple has room for improvement when it comes to performance/battery life (only 28 percent said they’re very satisfied) and ease of use (some 48 percent were delighted).

This article originally appeared on Recode.net.

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