Apple earnings: Can it weather the China storm?

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As critical as China has become to Apple's future, the tumbling stock market there has yet to dampen investor enthusiasm for the iPhone maker.

Heading into Tuesday's quarterly earnings report, investors are bullish: Shares are up 40 percent in the past year, topped by an almost 6 percent rally over the last week.

Analysts at Stifel, Piper Jaffray and Pacific Crest Securities have put out recent reports predicting that iPhone unit sales in the fiscal third quarter topped the average analyst estimate of 47 million. Stifel's Aaron Rakers raised his estimate last week from 43.5 million to 50.2 million, citing increased penetration in China, which accounted for 29 percent of revenue in the quarter ended March.

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"While China macroeconomic concerns will likely be a key investor focus, analysis of Apple's positioning/momentum in China remains strong," wrote Rakers, who has a "buy" rating on the stock and a $150 price target, 13 percent above the current price.

Analysts on average are looking for sales growth of 32 percent to $49.3 billion, according to a survey from Thomson Reuters. Earnings per share likely increased to $1.79 from $1.28 a year earlier.

There's plenty of anticipation over how well the brand new Apple Watch is selling, but the Cupertino, California-based company won't be providing much clarity, as sales will be included in the "other products" category. Among analysts, the average prediction for the quarter is 4 million units and 9 million for the year, according to FactSet.

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The Apple Watch just hit retail stores in the U.S. in mid-June, two weeks before the end of the quarter. Online sales began in the U.S. and abroad in April. The next couple quarters and beyond will indicate if Apple can sustain the initial pop that accompanies the hype of any new product it rolls out.

"We believe Watch demand has slowed sharply, but initial sales should be strong," wrote Andy Hargreaves, an analyst at Pacific Crest, in a July 16 report. He has the equivalent of a "hold" rating and a price target of $128.35.

In the meantime, results will still be driven by the iPhone, which accounts for about 60 percent of Apple's revenue.

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And that brings us back to China, Apple's second-biggest country for sales. The Shanghai Composite Index has lost 23 percent of its value since June 8.

Of course, the index had jumped 60 percent over the previous five months and has gained 10 percent since bottoming on June 29, so it's more a highly volatile market than a bear market.

Either way, Apple investors are less concerned about the Chinese market than the macro economy because consumer spending is what matters most. The country is still growing at a robust 7 percent year-over-year, thanks to a healthy dose of government stimulus.

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And because only one in every seven people in China are invested in the domestic stock market, "we don't think it affects the overall Chinese economy," John Burke, president of Burke Financial Strategies, told CNBC last week.

Apple is banking on it.