Apple’s 1Q12 earnings report will boil down to two simple data points: iPhone and iPad sales. Guidance will take a back seat, as will margin expectations and management commentary. The market wants confirmation that iPhone and iPad demand is robust, especially after Apple’s disappointing 4Q11.
The magic numbers will be 31 and 13. If Apple sold more than 31 million iPhones and 13 million iPads, Apple will have met expectations (sky-high for iPhone and lukewarm for iPad). Whisper numbers (the numbers that analysts secretly discuss) probably stand somewhere near 34 million iPhones and 15 million iPads, but missing whisper numbers usually won’t lead to negative EPS estimate revisions.
In an attempt to put the last few weeks of heightened iPhone 1Q12 expectations (and reduced iPad expectations) within context, and using my 1Q12 estimates published on November 18, 2011, I would put 27 million iPhones and 12 million iPads as the minimal bar Apple has to jump over in order to avoid significant negative EPS revisions and price target cuts.