SAN FRANCISCO (Reuters) ? Apple Inc once more faces lofty expectations after smashing iPhone sales records, but Wall Street remains confident the world's largest technology company will deliver another bumper quarter.
Investors worried about crumbling consumer spending, a darkening economic outlook and the rapid expansion of Google Inc's Android mobile software got some assurance after the company moved 4 million iPhone 4S units in three days -- more than double its predecessor -- despite lukewarm reviews.
Apple's shareholders have had plenty to fret about since August, when Steve Jobs handed the reins to Tim Cook.
The company then lost its leading visionary and co-founder when he died October 5. Some analysts say the short-term disruption offered a brief window for rivals like Google and its foremost Android partner, Samsung, to swoop in.
But the world's largest technology company by market value is expected to present a positive short-term picture -- sparked by roaring sales of its iPhone and iPad -- when it reports results for the July-September period Tuesday.
The iPhone 4S sales numbers catapulted Apple's shares to a record high last week, even though some of that rally rested on the iPhone 4S being available in two additional countries and more telecoms carriers from launch day.
The record sales have heightened expectations for the current quarter, which many investors expect will be enormous for Apple.
"The quarter we are focusing on is the holiday quarter," said Channing Smith, co-manager of the Capital Advisors Growth Fund, which owns Apple shares.
"We expect Apple to absolutely blow the doors off during Christmas."
Still, Apple has encountered a few uncharacteristic glitches or hiccups since Jobs exited in August. While the iPhone 4S rode pent-up demand and wider availability to record numbers, the initial response was disappointment over a lack of design changes.
And while the woes of rivals such as Research in Motion -- which experienced its severest outage last week -- appear to benefit Apple, the impending re-launch of Microsoft Corp and Nokia into the mobile arena and the increasing footprint of Android could hit Apple's sales.
Others worry that Apple's shares have gone too far, too fast.
On Monday, BGC Partners analyst Colin Gillis lowered his recommendation on Apple to hold, citing a steep run-up in price and some short-term turbulence such as some risk to profit margin from education pricing discounts offered on some Apple products and competition to the iPad from low-cost manufacturers.
"The company has to constantly set records just to meet expectations," Gillis said. "There is nothing wrong with Apple's business model or execution, but we do see that sentiment is overwhelmingly positive."
"It is possible shares pull back below $400, possibly even this week after the earnings report," he added.
For Cook and his executive bench, quarterly results offer what some analysts say is a welcome opportunity to focus on business, after headlines were dominated for a fortnight by Jobs' passing, which ignited a spontaneous outpouring of grief and sympathy from heads of state, Silicon Valley royalty and across the Internet.
Apple's iPhone delivers more than 40 percent of its revenue and provides much of the growth momentum. Wall Street has begun building in projections for up to 30 million of the smartphones sold in the December quarter, the crucial holiday period.
As with previous quarters, Apple -- which provides current-quarter estimates that Wall Street says are typically conservative -- needs to truly surpass expectations to drive a share rally, analysts said.
Current average projections put fiscal fourth-quarter revenue at $29.6 billion and earnings per share at $7.38.
But according to StarMine SmartEstimates, which places more emphasis on the timeliest forecasts by the most historically accurate analysts, Apple is expected to post earnings of $7.47 per share -- about 2.4 percent above the average estimate.
Revenue could come in at $29.8 billion -- about 1 percent above the average expectation.
Some investors recommend looking beyond merely iPhones and looking at Apple's other main devices: the two-year-old iPad, and the stalwart Macintosh line of desktop and laptop computers.
Wall Street in general expects sales somewhere in the neighborhood of 20 million to 22 million iPhones in the September quarter, north of 4 million Macs, and about 10 million iPads.
"Investors have plenty to look forward to from Apple as the year comes to a close, including stronger than expected demand for the new iPhone 4S, a strengthened digital ecosystem with the recent launch of the iOS 5 and iCloud, the continued momentum around the iPad 2," Ticonderoga Securities analyst Brian White said.
Beyond 2011, the picture is less clear. Many analysts expect Apple, sustaining its long-established product cycle, to unveil the third version of the iPad, which helped create the tablet computing market that it still dominates.
But rivals aren't sitting still. Microsoft is gearing up to launch Windows 8 for tablets, and its new phone operating software will soon debut on new partner Nokia.
Google, whose Android is already the world's most-used mobile software, continues to score partners. And Samsung, riding Android's success, may overtake Apple as the world's bestselling smartphone brand in the fourth quarter and beyond.
Still, investor enthusiasm for Apple continues for now.
"It's very hard to find any type of problem in the business," Capital Advisors Growth Fund's Smith said.
(Reporting by Poornima Gupta and Edwin Chan; Editing by Gary Hill)