Apple's (APPL) latest financial report shows the iPhone is still the key engine of the company's success. But the impact of its newest product, the Apple Watch, isn't clear.
"Revenue was in line, earnings were up, however the guidance lowered going forward really hurt them," JJ Kinahan, chief strategist at TD Ameritrade in Chicago, said.
The California tech giant turned in another strong performance Tuesday, thanks to sales of its signature smartphone. Apple said Tuesday that it sold more than 47.5 million iPhones during the three months ending in June, or 35 percent more than a year ago.
Apple was less forthcoming about the watch, which some analysts and investors see as an important indicator of the company's ability to produce successful new products. Top executives stood by their decision not to release sales figures for the company's sleek new smartwatch, saying the information could be used by competitors.
"[Apple CEO Tim] Cook called Apple Watch off to a great start, but a lot of people would say it's a so-so start," Kinahan said.
In one tantalizing clue, Apple reported $2.6 billion in revenue from the segment that includes the watch and several other products, or about $952 million more than the previous quarter, when the watch had not yet gone on sale. That's significantly less than the $1.8 billion in watch sales that analysts surveyed by FactSet were expecting.
But Chief Financial Officer Luca Maestri told The Associated Press that revenue from the watch amounted to "well over" that $952 million increase. He said the category also includes revenue from iPods and accessories, which saw declining sales in the quarter.
"We beat our internal expectations" for the watch, Maestri said, adding that the number of watches sold in the first nine weeks was greater than the number of iPhones or iPads that the company sold in a comparable period after those products launched.
Apple has previously said it sold 1 million iPhones in the first 74 days, or more than 10 weeks, after sales began in 2007. Apple has said it sold 2 million iPads in the first 60 days, with iPad sales hitting 3 million in 80 days after the iPad was launched in 2010.
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