Apple Inc.'s stock (AAPL) has dramatically outperformed the broader market this year, up 30%, even as its core iPhone sales have slowed. Now, as Apple prepares to report quarterly results at the end of this month, investors are likely to focus on whether CEO Tim Cook can bolster the company's overall sales and keep Apple's shares rising in the face of major headwinds.

What Investors Will Be Watching For

Investors will look closely at whether sales of Apple's flagship product, the iPhone, are slowing faster than estimated. In the most recent quarter, a 17% decline in iPhone revenues dragged down the tech titan's total sales by 5%. Sales performance for the iPhone, and also companywide, could be worse in the June quarter and going forward as the U.S.-China trade war bites into Apple's main business lines.

Investors also will be looking at pricing. Any sign of deteriorating pricing power for the iPhone among consumers might indicate that Apple is losing its luster as a brand. Meanwhile, rivals like Samsung, and lower-cost Chinese competitors like Huawei Technologies are gaining ground -- a sign that more and more consumers are reluctant to pay the above-market average retail prices that Apple has historically demanded for its iPhone models.

Bearish Analyst Estimates

The financial numbers are likely to be sobering for the fiscal Q3 quarter ending June. Analysts expect profit to come in at $2.10 per share, according to the 35 analysts surveyed by Yahoo Finance. That estimate reflects a 10.3% decrease from the year-ago quarter at EPS of $2.34. Revenue in the fiscal third quarter is estimated to come in at $53.4 billion, essentially flat from a year ago.

Despite those less than robust numbers, many analysts are confident that Apple's services revenue will be able to pick up the slack. “Services growth is critical in driving Apple’s overall top line, as well as potentially stabilizing overall company gross margins, which have fallen in each of the last five years,” wrote Bernstein analyst Toni Sacconaghi, as quoted in a recent Barron's story. Sacconaghi says Apple can extend double-digit growth in services for another 3-5 years.

In the latest quarter, Apple’s iPhone business made up 63% of revenues, while services accounted for 14%, with the latter growing by 16%. And services is expected to account for a larger percentage of sales as the company doubles down on services like digital subscriptions, advertising in the App Store, and its own on-demand streaming service, Apple TV. 

The China Factor 

Another major factor that may continue to hit Apple’s profits, and therefore the share price, is the re-escalation of trade tensions between the U.S. and China. In fiscal Q2, Apple’s sales in China, a key market which accounts for roughly 20% of total revenue, fell 22%. And some analysts say those sales could fall even more sharply if the trade war continues.