Gene Munster on the Apple Watch, Earnings Outlook

Ahead of Apple’s third-quarter earnings report, a top Apple analyst explained why he is eyeing iPhone unit numbers.

“The magical number is 49 million,” said Piper Jaffray Managing Director Gene Munster during an interview on The Intelligence Report with Trish Regan. “What that would imply is a fractional acceleration in the year-over-year growth of the iPhone versus last quarter.”

Munster added, “that 49 million really speaks to them gaining share at the high end, which would really send a message to investors that there’s some sustainability to this going into the next cycle.”

He also commented on the Apple Watch.

“I think there were some expectations that this was going to have a lift off similar to the iPad,” Munster said. “That’s just not realistic when you come out with a new category of wearables, which is just a whole new paradigm for developers.”

Munster told Regan he is looking forward to the changes coming to the gadget later this year.

“Where things start to get a little bit more optimistic is this fall, when they come out with a new operating system for the Watch that will allow apps to run natively on the Watch,” he said. “That's going to improve the functionality. I think all these questions about why get a watch… some of that will be answered.”