APPLE EARNINGS PREVIEW

Original: It's been a bad year for Apple.

The stock is down 27%.

Every day an analyst slashes his or her price target on the stock, as well as lowering EPS and revenue estimates.

The world has come to realization that the iPhone market as currently constructed is hitting saturation.

The next wave of growth is going to be very hard for Apple to find because its revenue and profits are so gigantic that growing from here will be a challenge. Whatever product Apple makes next will not be as lucrative as the iPhone.

Then, there's the margins. Those are going to come down when the product mix shifts to lower margin iPad Minis, and potentially a lower priced iPhone.

Samsung stole Apple's spotlight all quarter.

Apple hasn't had a single product announcement since October of last year. It doesn't appear to have any new products lined up until June at the earliest.

The only time the management team speaks is during earnings calls. (With the exception of a round of interviews Phil Schiller did right before Samsung released the S4.) Lately, earnings calls have not been great. Apple is missing analyst estimates, something that never happened in the past.

Tonight, some people are expecting Apple to miss its own guidance. If that were to happen, watch out. It's going to be a mess.

But, here's the good news for Apple.

Tonight could be the low point. It could produce relatively bad results. It could put out revenue guidance that's so low analysts go scrambling to Excel to make their projections even lower.

After this earnings report, the future looks very good for Apple.

• We should get new iPhone software in June.
• Then a new iPhone 5S in the June-August time frame.
• Perhaps even a cheaper iPhone around that time.
• Then there's the iPad 5, which could be out this summer or fall.
• The iPad Mini will likely get an upgrade.
• An iWatch or an Apple television could be out by year end, or early next year.

Those events will give Apple an opportunity to reset the narrative on the company. It can get back to talking about why people love iPhones and iPads.

Because while it's been silent, the story has shifted. You would think Apple is going out of business the way people talk about the company right now.

It's not. Even in this quarter, which is going to be a rough one, Apple is expected to generate $42.3 billion in revenue. For some context, Google's total 2012 revenue was $50 billion.

Tonight, Apple has a chance to hit the reset button. It can lower expectations while hinting about its plans for the future.

Here's what sell-side analysts are looking for from Apple, via Gene Munster:

• Revenue: $42.3 billion
• EPS: $9.98
• Gross margin: 38.5%
• iPhone: 36.5 million
• iPad: 18.3 million
• Mac: 4.1 million
• iPod: 6.25 million
• June quarter revenue: $38.6 billion
• June quarter EPS: $8.97
• June quarter gross margin: 38.6%

Munster also adds that the buy-side is thinking iPhones come in at 35 million units. It also thinks the gross margin is 38%.