Wood: iPhone Installment Plans, Apple Watch Could Catch Investors By Surprise

Some investors are forgetting Apple Inc. AAPL could still surprise in its earnings report, set to be released Tuesday after the bell. According to ARK Invest CEO Cathie Wood, installment plans may give iPhone sales additional growth.

"Accelerating the sales cycle could be quite important," she told CNBC on Tuesday. Wood noted that in Verizon Communications Inc. VZ's last quarter, installment sales rose significantly. "This could turn Apple's revenue model into more of a recurring revenue model, which really will help their valuation," she added.

What About China?

Wood also talked about how this idea could affect smartphone buyers in China. "We've been seeing some big surprises [in China]," despite negative supplier commentary.

"What we think could be happening is that there's a fear that things are getting tough, and there's potentially an inventory drawdown."

The Apple Watch Ties Into Healthcare 'Importantly'

Investors also have reasons to be bullish on the Apple Watch. "The Watch could play an important role in healthcare, much more important than people anticipate." Wood highlighted that the device has 60 percent of the smartwatch market, something that shouldn't be overlooked.

If the Watch can hit 15 million cumulative unit sales in the next quarter, that will be on pace with the iPad, a "surprisingly" solid contributor to the company's top line.

"We think the stock has discounted a lot of bad news," specifically related to its Asian suppliers. "The big fear is next quarter sales are going to be down on a year-over-year basis...the even bigger fear is that we could see the first down year for iPhone sales ever."

In Wood's opinion, that's "not going to be the case." The Watch, along with recurring sales from phone carrier installment sales could give upside to shares, she added.

Apple presently trades near the $100 level heading into earnings.