Don't judge Apple purely on iPhone sales

Later today Apple will unveil its Q1 2017 financial report, and while most eyes will be on iPhone sales, there are far more important metrics you should be keeping an eye on.

Apple is expected to slide back into growth for the first time in several quarters when it reports quarterly Q1 2017 earnings on January 31. But while most eyes will be on iPhone sales, there are far more important metrics you should be keeping an eye on.

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So, if iPhone sales aren't the metric to focus on, what is?

Back in October Apple said it expected to post revenue of between $76 billion and $78 billion, up from the $75.9 billion of December 2015. iPhone sales in the region of 75 million units would let Apple hit this number. Since Apple tends to be pretty conservative when it comes to predictions, this could be anywhere up to $80 billion.

The reason I'm advising that you move the focus away from iPhone sales specifically is that over the past year Apple has made it easier for it to sell iPhones. For example, back when Q1 2016 financial results were release, the low-priced $399 iPhone SE didn't exist, and this has been instrumental in dragging down the iPhone's average selling price (ASP) due to its popularity.

Back in Q1 2016, the Phone ASP was $691, and that's a telling metric. If Apple can get back in this ballpark then it's a sign that the iPhone 7 is selling strongly, and that the higher-priced iPhone 7 Plus is also doing well. If Apple can surpass this then the iPhone 7 Plus is doing incredibly well. If the ASP continues to hover around $618 -- which is where it was Q4 2016 -- then iPhone 7 sales are feeling pressure from the iPhone SE.

Another metric to keep an eye on is the "Other Products" category of the summary data (which includes sales of Apple TV, Apple Watch, Beats products, iPod, and Apple-branded and third-party accessories) because here we will get a sense of how well the Apple Watch and AirPods are selling. According to analyst Neil Cybart of Above Avalon, revenues in excess of $4.5 billion in this category would suggest Apple Watch sales of more than 5 million.

Then there are Mac sales. Given that PC sales are a mess, it's easy to assume that this will carry over to Macs, but the fact is that Mac sales appear to been pretty resistant to the problems plaguing their Windows counterparts.

While Mac sales have their ups and downs, for the past three years we've seen them float around the lower 4 million and upper 5 million marks. With a MacBook Pro update landing a few days before the Q1 2017 quarter began, it could be a source of good news for Apple.

Also keep an eye on iPad sales. Is this product out of the woods or is it still on life support? The number to watch for is 16.1 million. Sales above this mean the iPad is back in growth, less than that and the slide is ongoing, with how far from that marker indicating how steep the slope is.

Finally, take a look at the R&D spending. Under Cook Apple R&D spending has quadrupled to more than $10 billion a year, but the company has not managed to cultivate a big hit on par with the iPod, iPhone or even the iPad. Will Apple pile more dough into R&D, or will it take the foot off the gas?

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