This means the total dollar value of the iPhones sold in the quarter may be more indicative than the number of phones sold. Analysts expect the sales were worth $30.8 billion in the quarter, or 56 percent of Apple's overall revenue. Deviations from this figure could cause big movements in the stock price.
There is renewed speculation that Apple could make a cheaper iPhone for the developing world, but most analysts believe the company will stick to its practice of keeping older iPhones in production and cutting their prices as new models come out. The problem is that the price cuts are relatively minor. A two-year-old iPhone 4 costs more than many new Android phones.
When reporting results for the July to September quarter three months ago, Apple shocked Wall Street by saying it expected earnings of just $11.75 per share for the October to December quarter. The company usually lowballs its estimates, but this was unusually far from the $15.59 per share average analyst estimate at the time. The reason, Apple said, was that it had so many new products coming out — including the iPhone 5 and iPad Mini — and fresh production lines are more expensive to run than mature ones.
Analysts then pulled back sharply on their estimates. Their average forecast is now $13.45 per share, according to FactSet.
In terms of sales, Apple said it expects to report about $52 billion in revenue, and analysts have wavered only slightly above that figure — they now expect sales of $54.9 billion.
While Apple's future prospects are in doubt, the company's supporters have one strong argument in their favor: the stock is cheap compared to current earnings, and even if the iPhone's sales growth slows, Apple will continue to generate plenty of revenue. The stock trades at 11 times the past 12 months of earnings, compared with 15 for Microsoft Corp. and 22 for Google Inc. Those figures don't take into account Apple's enormous cash pile —$121 billion— which boosts its value even further.
Despite its size, Apple's stock is no stranger to corrections. In 2008, in the midst of recession, Apple's stock fell by more than half, to under $100 per share. At the time, the iPhone was a year old and hadn't revealed its full potential.
It was only in early 2012 that its market capitalization decisively outgrew that of Exxon Mobil Corp., previously the world's most valuable company.
A smaller correction last year, also prompted by speculation about the future of the iPhone, took the stock down 16 percent before it rebounded.
"We believe investors that can look through this noise will be rewarded in 2013," said Brian White at Topeka Capital Markets. "The negative sentiment around the stock has reached epic levels that we haven't seen in recent memory and yet we believe the product portfolio has never been stronger."