For the tech sector, September is Apple (Nasdaq: AAPL) news season.

On Wednesday, at long last, the company broadcast its iPhone 7 announcement from San Francisco. Along with a new addition to Apple’s smartphone line, new Apple Watches and iOS updates were revealed.

The big jaw dropper? Apple’s ditching of headphone jacks in favor of Bluetooth earbuds.

[ad#Google Adsense 336×280-IA]The spectacle lent a nice boost to Apple stock.

But in the wake of it all, we’re asking this: Do these flashy reveals actually affect the company’s bottom line?

Do they hold real importance for long-term shareholders?

To find out, we looked at Apple’s earnings history and revenue breakdown.

These show us which products are most important to Apple’s business model – and which releases have really made a dent in the market.

The Dominance of the iPhone

We’ve all heard about Apple’s humble beginnings 40 years ago, constructing bulky computers in a garage.

But fast-forward to today, and it’s smartphones that make up the majority of the company’s revenue. This has been the case for some time now.

In fact, Apple has made more than half of its money from iPhones since 2012.

What’s more, iPhone releases have correlated with earnings surprises in the past.

Remember when Apple released the iPhone 6 back in September of 2014? A few months later, the stock skyrocketed on news that Apple had beaten EPS estimates by almost 18% that quarter.

This phone-centric business model implies that the latest reveal could make a big difference in Apple’s revenue down the line.

Now all eyes are on the iPhone 7 – specifically, how consumers respond to it.

The question now is… what to make of the Apple Watch?

Is the Apple Watch Worth Watching?

For investors, it makes little difference at this point. The same data sets that illustrate the importance of the iPhone are less flattering to the Apple Watch.

The product has struggled with relatively low sales numbers compared to the rest of Apple’s lineup. It’s lumped into the “other products” category along with speakers and chargers.

In all, this segment of Apple’s business has consistently made less than 10% of company revenue.

What’s more, the big unveiling of the Apple Watch last April had underwhelming financial results. Apple did beat earnings estimates that quarter… but barely. In fact, the margin was considerably smaller than many investors were hoping for. As a result, Apple shares fell about 8% on the day of the report.

So if you’re an Apple shareholder – or thinking about becoming one – it’s iPhone 7 sales that you should be concerned about. Big announcements can nudge a stock higher, sure…

But it’s earnings that send companies soaring.

— Samuel Taube

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Source: Investment U