While rumors and speculation regarding the upcoming iPhone 5 keep intensifying, Apple has given no clues except setting the launch of its next mobile operating system to "this fall." The upgraded version, called iOS 6, is expected to ship with the next-generation iPhone.

With nothing certain to go on, investors and Wall Street are left with just guesses on the company's fiscal third quarter results, due on Tuesday after the closing bell. Ahead of the launch of the much anticipated smartphone iteration, most are predicting that iPhone sales will slump over the next two periods, as consumers await the next-generation iPhone. Presumably called the iPhone 5, the new device may boast a refreshed design and LTE capabilities.

This expected drop in sales, however, does not mean Apple will lose customers, although the company faces increasing competition from rivals such as Samsung and the new Windows Phone operating system, also expected to launch this fall.

"While multiple quarters of sequential declines in iPhone units would normally be expected to pressure Apple's stock, we suspect the window for the bears is limited by the imminent iPhone 5 product cycle and already prudent near-term investor expectations," Goldman Sachs' Bill Shope wrote in a not to clients this week, according to MarketWatch.

Mixed Performance

Apple shares are still 50 percent higher for the year to date, but the stock's performance has been rather mixed lately. Shares slipped after the last report, then made a comeback. Over the past three months, Apple has seen its stock rise slightly more than 8 percent. Ahead of the closing bell late Friday afternoon, July 20, the stock was down 1.4 percent to $605.71.

According to consensus estimates from FactSet, Wall Street expects Apple to report earnings of $10.37 per share on revenue of $37.5 billion after the closing bell on Tuesday, July 24. The company saw earnings of $7.79 per share on revenue of $28.6 billion in the same period last year.

Apple is expected to see a 33 percent earnings growth for the period, but most investors are still set on iPhone sales relative to the March quarter, when the company sold a whopping 35.1 million units. A MarketWatch survey of more than a dozen brokerage notes, however, indicates that Wall Street is expecting a drop of about 20 percent sequentially, i.e. unit sales closer to 28 million for the June quarter.

It is rather difficult to make estimates based on the company's past performance. Apple saw a nine percent climb in iPhone sales between the March and June quarters last year, then faced a 16 percent decline in the following period ahead of the launch of the iPhone 4S in October.

Pause for the Next iPhone

According to Andy Hargreaves of Pacific Crest, Apple may not be able to meet Wall Street's overall revenue estimate for the quarter, as the next-generation iPhone was likely to create "the mother of all handset pauses" ahead of its launch. "We believe some investors continue to underestimate the likely showdown in iPhone sales over the next few months," said Hargreaves, noting that "extremely strong expectations for iPhone 5 will likely overwhelm any increasing concern" about near term results.

Toni Sacconaghi of Bernstein Research shares the same doubts, saying there is "a reasonable probability that Apple will miss consensus revenue expectations." Sacconaghi cited economic weakness in China, a decline in iPhone sales, as well as the delay in launching the new iPad in China.

"We are a bit torn on Apple's stock, but in balance believe that it risks treading water or underperforming coming out of earnings," Sacconaghi wrote in a note on Friday, July 20, as cited by MarketWatch. "That said, we underscore that the near term risks are timing related and there is no fundamental change to our investment thesis in Apple."

RIM, Nokia Weakness Helping Apple

Meanwhile, some analysts believe the iPhone is likely to benefit from rivals' continued weakness. Gene Munster of Piper Jaffary placed his iPhone unit sales forecast at the high side of estimates, in the 28-29 million range, but noted that estimates for the September quarter will likely be "reset" ahead of the next-generation iPhone launch.

"We remain confident that iPhone units could be better than the Street given industry discussions around sustained weakness at RIM and Nokia in the June quarter, but we do not believe smartphone sales have slowed significantly, suggesting market shift to Apple and Samsung," the analyst wrote this week, as cited by MarketWatch.

iPad vs. iPhone

Meanwhile, growth for the company's popular iPad is expected to offset the predicted drop in iPhone sales for the June period. Analysts expect roughly 14.5 million iPads to ship, which means a 23 percent increase from the March period.

"In our view, it's only a matter of time before iPad shipments exceed iPhone shipments," Charlie Wolf of Needham wrote in a report earlier this month, forecasting one of the high targets on Wall Street - 20 million iPad unit sales for the June quarter. "The iPad is invading the business market at a much faster pace than the iPhone," Wolf explained. Apple also launched the iPad in China on Friday, July 20, just weeks after agreeing to pay $60 million to settle a legal dispute with Shanghai-based Proview Technology over the iPad trademark.