Apple’s Stock Leaps 5% on Strong iPhone Sales

| Analysis

Strong opening weekend sales of Apple's iPhone 5s and 5c sent shares of $AAPL soaring on Monday. In the late afternoon session, the company's stock jumped 5.05 percent, and were trading at US$491.00 per share, up $23.59, on heavy volume.

AAPL

AAPL Chart for September 23rd, 2013
Source: Yahoo! Finance

Apple announced early Monday morning that it sold 9 million iPhone 5s and 5c models in its opening weekend, almost doubling the 5 million units the company sold in 2012 during the opening weekend of iPhone 5 sales. The news ran contrary to pronouncements of doom and gloom that surrounded Apple's decision not to announce iPhone 5c preorders, and it far surpassed the 6 million units many Wall Street analysts had predicted.

Apple also said that it expects its financial results to come in at the high end of its guidance for the September quarter. In July, Apple guided for revenue between $34 billion and $37 billion, and Monday's update means Wall Street should expect something closer to the higher number.

All of which cheered investors who have been told repeatedly that Apple is failing, can no longer innovate, and that the iPhone is dying platform. The most recent wave of such pronouncements came after Apple didn't announce results for iPhone 5c preorders. That decision was interpreted in some quarters as proof that Apple's new iPhones were a flop.

Reality, however, can be a harsh mistress, and Apple's actual first weekend results suggest the new iPhone models are likely to prove the most successful yet.

There are questions about the iPhone launch, however, and that includes product mix. Apple didn't break down numbers for specific models, and we know that supplies of the gold and silver (the new white) iPhone 5s were severely constrained.

Localytics issued a report on Monday that said the iPhone 5s outsold the iPhone 5c by 3.4x. It remains to be seen how much of a factor early adopters are in that figure, and how sales will shape up in the December quarter.

Apple's ability to produce additional inventory is also an unknown factor. Clearly Apple had more inventory on hand for this launch than it has ever managed to achieve before, but it wasn't enough to satisfy all demand, and it remains to be seen how quickly the company can get additional inventory into the channel.

Still, Wall Street seems pleased with what it sees, suggesting that Doug Kass is once again wrong and Carl Icahn is once again correct.

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Comments

wab95

Doug to Carl: “Icaaaaaaaaahhhhhnnnnnn!!!!”

wab95

In fairness, I think this will prompt some sober reflection amongst some analysts. I heard a bit of that this morning on Bloomberg Surveillance. I’ll be curious to hear the rest of the chatter this evening.

Great summary, Bryan.

vpndev

>In fairness, I think this will prompt some sober reflection
>amongst some analysts.

I’d love to agree but I can’t. It seems that they have ignored facts for so long that they no longer recognize them, preferring to stay in their private echo-chamber.

Would that it were not so but ...

wab95

vpndev:

I agree with your sentiment, in that I don’t expect such reflection to be widespread, however this morning I caught a glimmer - nay a mote - of hope, in that one of the hosts of Bloomberg Surveillance pointed out that in one weekend Apple sold as many new smartphones as it took Samsung to do in a month, and does it make sense to continue to beat the drum of Apple’s lost cool and Apple’s moribund creativity, and more specifically, to continue to compare Apple and Samsung as if they are really in the same league.

For one brief moment, I heard angels sing.

Then the analyst in the hot seat responded that, as these are the only two companies making any real money on smartphones, comparisons were valid. While I view her answer as incomplete, I am encouraged that non-technophiles are beginning to question that these cries of Apple doomed fly in the face of facts, and that Apple and Samsung are not only quite different, their juxtaposition may be a false dichotomy.

Sometimes, albeit too infrequently, reason and sanity see the light of day, if only for a moment.

vpndev

I wonder how long it will be before Tizen is updated for its “new look” ??

Anyone making book on this [only where legal, of course] ??

ibuck

Is it Arrogance or Cluelessness by these Apple bashing analysts?  Or a ploy for page hits? How do you tell one of the largest, most profitable businesses in the world that they are doing it wrong?

Why don’t these completely wrong opinions adversely affect these analysts reputations?

vpndev

>Why don’t these completely wrong opinions
>adversely affect these analysts reputations?

To me, this is the big mystery. Everywhere I’ve ever worked, you are measured on results. Why not here?

ibuck

Bosses hold their employees accountable for the quality of their work & their productivity. No one seems to hold these analysts feet to the fire.

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