Apple Inc. AAPL is scheduled to release its third-quarter earnings next Tuesday, and most analysts right now are interested in the figures concerning the watch. However, Amit Daryanani, RBC Capital Markets equity analyst, thinks the company is not going to reveal much data regarding it and investors should pay their attention to something else.
Daryanani was on CNBC Thursday to discuss the big thing investors should focus on in Apple's second-quarter results.
Track The Migration
"I am not sure they will give you the watch clarity at this point at least," Daryanani began. "They'll put it in the other category; I think, they are going to talk it over there. The big thing to focus on with them is, last quarter they talked about how only 20 percent of the ecosystem or the base had migrated to the 6 product cycle."
Daryanani explained, "I think that's a metric you want to track because that tells you A) they are having a big installed base that's going to keep migrating, but B) all this that you have seen so far has been more share gains from Android versus the installed base going to the 6 cycle."
Chinese Impact
Daryanani was asked if the slump in Chinese markets is going to have any effect on Apple's shipments to China. He replied, "It's going to be interesting to see how they address this whole dynamic, right? And to your point, there is a hit on the macro side that in China you have to contend with. But the other side of the equation is, the 4G installations in China are growing fairly rampantly.
"China Unicom, China Telecom are both ramping up 4G aggressively. So, it seems like you have two different cross-trends playing out. It will be interesting to see which one wins. We think there's a slowdown in growth, but it's still going to be solidly in double digits out of China for them," Daryanani said.
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