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Apple Earnings: A Hunt for Clues on the Tech Titan’s Future

Christina Scolaro
Big Data Download

Investors are wondering if Apple can once again become the exciting earner it once was. They’ll get a glimpse of the future when Apple reports earnings after the bell Tuesday. After years of unmatched growth, its market cap has shrunk by almost $300 billion in the past seven months. So will Apple ever recover?

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Investors will be listening in on the earnings call in hopes of a new, innovative product. We already know updated versions of old devices aren’t exciting investors or customers. The iPhone 5 and lower-priced iPad didn’t do much for the stock. In fact, shares have tumbled 40 percent since iPhone 5 launched in September.

Shipments of the iPad and iPhone have slowed in the third quarter, but Andy Hargreaves of Pacific Crest Securities says that’s part of a normal product cycle, and there’s nothing that can be done about that.

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Then there’s rival Samsung. The company has done a keen job of consolidating the Android share with its Galaxy smartphone line.

Hargreaves said that reports of Apple’s decline are, if anything, overstated.

“Perception is that Apple is getting smoked, but it’s still the best-selling smartphone. No other phone is even close,” he said. “It gained share in the U.S. this year. Globally they’re losing share at the low- end, but high-end is where the money is. Profit potential should be about the richest customer base and most loyal customer base and they’re doing that.”

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Expanded distribution through China Mobile can add significant volume to Apple’s numbers. “There are very few large carriers in the world with a substantial customer base that Apple doesn’t distribute through,” Hargreaves said. “This could come as soon as September and could add an incremental 10 million to 15 million units a year.”