2019 was the year of contradiction for Apple (NASDAQ:AAPL). While iPhone sales fell year over year in each quarter, investors became increasingly persuaded that better days were ahead, and the stock has soared more than 100% over the past year.

The iPhone's troubles may be over, with a number of recent reports suggesting that the newest model of the iconic device, the iPhone 11, is a hit with consumers and may have finally returned to growth. This could be one of the key drivers when Apple reports the results of its fiscal 2020 first quarter after the market close on Tuesday, Jan. 28. Let's look at a few metrics that could spell continued success for Apple or cause its stock to come crashing back down to earth.

Apple CEO Tim Cook on stage with the Apple logo projected on the screen behind him.

Apple CEO Tim Cook. Image source: Apple.

1. Revenue

After two successive quarters of year-over-year declines, Apple returned to revenue growth in both Q3 and Q4, producing sales increases of 1% and 1.8%, respectively -- even as iPhone sales struggled. This bolstered investor confidence that there's more to Apple than just the iPhone.

For the first quarter, management is forecasting revenue in a range of $85.5 billion to $89.5 billion, which would represent growth of between 1% and 6%. Wall Street is also squarely in the growth camp, with consensus estimates coming in at $88.39 billion, near the high end of management's range. 

2. Robust bottom-line growth

As Apple's higher-margin service segment has grown, the company has been able to drop more of its sales directly to the bottom line. It doesn't provide specific guidance on earnings per share, but based on other metrics it's offered, we can make an educated calculation.

Assuming Apple retires about 86 million shares (similar to what it repurchased in the fourth quarter), the company is expecting net income of about $19.58 billion at the midpoint of its guidance, which would result in EPS between $4.43 and $4.55. Analysts are clearly on board, with consensus estimates of $4.54, near the high end of Apple's range. 

3. iPhone growth?

Driven lower by the trade war and economic weakness in China, sales of the iPhone fell 15%, 17%, 12%, and 9% in the four fiscal quarters of 2019. Since iPhone sales generate more than half of Apple's revenue, the company's results took a big hit, posting year-over-year revenue declines in both the first and second quarters.

The U.S. and China have reached a preliminary trade accord. That, combined with the introduction of the iPhone 11, may have turned things around for Apple's flagship device. Recent data suggests that iPhone sales in China surged in December, increasing 18% year over year. That may be enough to return the company's biggest seller to growth.

The iPhone in six different colors stacked together.

The iPhone 11. Image source: Apple.

4. The growing importance of services

Looking back, Apple's push to grow its services business seems prescient, since the segment is now the company's second-largest revenue producer. In the fourth quarter, services accounted for 20% of Apple's business, up from 17% in the prior-year quarter.

Perhaps even more important, services is a much more profitable business for Apple, generating gross margins of 64.1%, versus 31.6% for products in the fourth quarter. As the services segment becomes an increasingly larger part of Apple's business, it will also help boost overall profitability.

5. Apple's biggest growth driver

As crucial as both the iPhone and services are to Apple's business, the wearables, home, and accessories segment is becoming an important contributor to the company's growth prospects. Driven by strength in wearables (AirPods, the Apple Watch, and Beats products), the segment grew 54% year over year in the fourth quarter, and now accounts for 10% of Apple's sales. 

That number may have soared even higher spurred by the popularity of AirPods and the release of AirPods Pro, since the company had difficulty keeping up with demand during the holiday quarter.


Apple's other business segments helped to take up the slack over the past year, making it one of the top technology stocks of 2019. A strong performance by the iPhone in the first quarter could be just one catalyst that sends the stock even higher.