Apple Earnings Preview: 5 Numbers That Matter

Apple will deliver its summer earnings update on Tuesday afternoon, reporting its June quarter results and September-quarter forecast. Here's a rundown of the most important numbers to look for.

1. iPhone Sales

The iPhone is Apple's most important product line, representing half its revenue over the past year (and likely much more of its profit). So the iPhone's strength or weakness has a big effect on Apple's overall performance. Consider this: 1 million iPhones shipped represents about $650 million in revenue.

The newest iPhone is more than 6 months old, but signs point to a good quarter nonetheless: Verizon's iPhone activations (2.7 million) exceeded expectation. Enthusiastic reception in China could help further.

Anything below 25 million iPhone shipments would be disappointing, while anything more than 30 million would be very strong. Something in between is most likely.

2. iPad Sales

The iPad represents Apple's future, especially as the company reportedly plans to start selling a cheaper, smaller iPad later this year.

Now that the latest model is no longer supply-constrained, we're about to see what current iPad demand really looks like. Wall Street expects around 16 million iPad shipments for the June quarter. A number north of 20 million would be impressive.

3. China Stats

China is Apple's second biggest market and could someday become its first. Meanwhile, the company has been providing greater visibility into its business there. Last quarter, for instance, it disclosed revenue for greater China, relative iPhone sales velocity, Mac growth, and more. Any updates here will shed light on future prospects.

4. OS X Mountain Lion On-Sale Date

Apple used its earnings call last July to announce that OS X Lion, the latest Mac operating system, would ship the next day. If Apple decides to follow a pattern, it could announce that OS X Mountain Lion will ship on Wednesday. That would fit the previously announced July time frame.

OS X itself isn't a big money maker for Apple, but shipping on time is an important qualitative milestone: It's now a company that can "walk and chew gum at the same time," in the words of writer John Gruber. That wasn't always the case. Apple previously took resources away from the Mac to squeeze iPhone development through.

5. Gross Margin

Most casual observers probably don't care about Apple's ability to remain profoundly profitable, but investors do - especially in a quarter when the less-profitable iPad plays a bigger role than the iPhone in the company's overall results. Anything above 45% would be solid, especially if it's near the 47% Apple posted after the iPhone-heavy March quarter. Anything below 43% would be disappointing.

What Matters Less

Mac sales should rebound, but they aren't all that important anymore. The Mac rarely accounts for more than 20% of Apple's business in any quarter. Apple's forecast for the September quarter probably won't be very ambitious, as most of the new product announcements - iPhone, iPad, maybe an Apple TV set - aren't expected until October. Meanwhile, it will be interesting to read between Tim Cook's lines to divine how he's shaping Apple, but dramatic revelations appear to be unlikely.

Stay tuned to ReadWriteWeb Tuesday afternoon for Apple earnings coverage and analysis.