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Another Sign This Will Be a Good Year for Apple Inc.'s iPhone Business

Ahead of Apple 's iPhone launch on Friday, it's clear there is robust demand for the device. Online preorders for the iPhone 6s Plus are now showing a ship date of three to four weeks. And while some iPhone 6s models ordered at the time of this writing are scheduled to ship as early as Sept. 29, none are actually estimated to arrive this Friday as some were still scheduled to as of last Friday.

But beyond slipping ship dates, there's more evidence pointing to a robust iPhone launch. This new sign comes from the outspoken T-Mobile CEO, John Legere: Preorders for the new iPhone 6s are up 30% compared to the year-ago period, he said on Twitter Tuesday evening.

That was fast. Here we go... 1/ @TMobile customers are pumped to get the new #iPhone6s -preorders up >30% over last year! #WeWontStop- John Legere (@JohnLegere) September 22, 2015

This is considerable growth. For perspective, this 30% year-over-year growth in iPhone preorders nearly doubles T-Mobile's 17% growth in customers during this period. Sure, much of this growth in iPhone sales is likely driven by T-Mobile's aggressive push to promote its device upgrade programs. But it at least suggests Apple's iPhone business looks like it will have another solid year on the back of its new iPhone 6s and 6s Plus models.

Apple shared similar positive sentiment regarding demand for its newest iPhone models when a spokesperson told CNBC earlier this month the pace of initial preorders for the latest iPhone put Apple "on pace to beat last year's 10 million unit first-weekend record when the new iPhones go on sale Sept. 25."

Good news for investors

These early signs of success for Apple's new lineup bode well for the stock. The importance of Apple's iPhone segment to Apple's overall business couldn't be overstated. Not only does the segment now account for 63% of the company's revenue (up from 53% in the year-ago quarter), but iPhone also represents its most profitable product segment. The gross profit margin for Apple's iPhone business is estimated to be around 50%, well over its overall gross profit margin of about 40%.

Image source: Apple.

In light of Apple's very tough comparisons in the year-ago period following the iPhone launch, the company is going to need the phone to really resonate in the market to continue growing its business. IPhone revenue in the year-ago quarter, or Apple's fiscal Q4, was up 21% from the prior year. But since the iPhone launch only impacts about a week or so of Q4 (last year and this year), the real comparison investors will be watching is whether or not Apple can trump its massive iPhone sales during the holiday quarter, or Apple's fiscal Q1. IPhone revenue during Apple's first fiscal quarter of 2015 -- the first full quarter of iPhone 6 and 6 Plus availability -- was up a monstrous 57% from the first fiscal quarter of 2014, driven by 46% year-over-year growth in iPhone unit sales. Will Apple be able to match this huge holiday quarter this year?

After a positive update from Apple and T-Mobile on iPhone preorders, it's looking like Apple has a decent chance at continuing to grow its most important segment.

The next key data point on iPhone sales to watch will be launch weekend iPhone sales , a stat Apple usually shares on the Monday following the launch weekend. Last year, Apple shipped 10 million iPhones during the launch weekend. How many iPhones will Apple ship during this year's launch weekend?

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The article Another Sign This Will Be a Good Year for Apple Inc.'s iPhone Business originally appeared on Fool.com.

Daniel Sparks owns shares of Apple. The Motley Fool owns and recommends Apple. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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