AT&T to Set New Quarterly iPhone Record in Holiday Q4 [Update]

| Apple Stock Watch

[Updated at 8:07 PM: Late on Wednesday, UBS analyst Maynard Um released a second research note raising his December forecast for Apple’s iPhone sales to 30 million units. Accompanying the new forecast, the analyst raised Apple’s revenue estimates to US$38.5 billion from $37.2 billion. He raised earnings per share estimates to $9.90, up from $9.47. - Editor]

iPhone Sales

AT&T told UBS analyst Maynard Um that its iPhone sales are off the hook this quarter. Ma Bell said on Wednesday that it sold some 6 million iPhones in just the first two months of the quarter, just shy of the company’s previous full quarter record of 6.1 million units—the company expects to blow past that number during December, which has traditionally been a good month for the iPhone.

The company said that pent up demand for the iPhone 4S, which was released at the beginning of the quarter, was a big part of why the device is doing so well at the carrier. It also expects the iPhone 3GS, which is free with a two year contract, to boost sales during December.

In a research note obtained by The Mac Observer, Mr. Um said that he had modeled for just 6 million iPhones sales through AT&T for the full quarter. In light of AT&T’s announcement, he increased that forecast to 7.2 million—a number that most will still see as quite conservative.

Despite this change, he did not adjust his overall iPhone forecast for Apple, leaving that number at 28 million units for the quarter [Editor’s Note: See the update note above for revised estimates]. He did say, however, that he continues to see upside to that estimate, and noted that for every one million units in incremental iPhone sales, Apple’s earnings per share (EPS) goes up by about US$0.24.

He also noted that overall Phone 4S demand remains strong, writing, “Demand for iPhone 4S remains robust as the holidays draw closer and Apple continues to expand country and carrier launches. Online wait times are still 1-2 weeks and our most recent checks indicated the device continues to sell-out at stores daily.”

Mr. Um maintained his “Buy” Rating on AAPL and his $510 price target for the stock.

Shares of AAPL moved lower on Wednesday, ending the day at $389.09, down $1.86 (-0.48%), on light volume of 10.9 million shares trading hands.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

Comments

Garion

Record sales of AT&T iPhones in Q4 of 2011.

So much for all the predictions that iPhone customers would abandon AT&T in droves as soon as other US carriers got the iPhone.

Lee Dronick

So much for all the predictions that iPhone customers would abandon AT&T in droves as soon as other US carriers got the iPhone.

They will be saying that it is because of service contracts. Maybe or maybe not, but many people like me had iPhone 3G contracts that expired long before upgrading to the iPhone 4S. There are a lot of factors including that customers may simply be satisfied with the service.

Garion

They will be saying that it is because of service contracts.

But being tied by a contract with AT&T doesn’t really explain why so many people have chosen to sign up for another 2 Years with AT&T this quarter, does it?

I’m inclined to go with the simple explanation you offer; a lot of iPhone customers simply seem to be satisfied with AT&T’s service despite all the criticism they’ve been getting through their time as the exclusive carrier of the iPhone.

Terrin

I dislike AT&T. This largely has to do with it’s horrendous customer service and how it uses our money to try to lobby the government to throw us under the bus at every chance it can get. That, however, don’t mean AT&T doesn’t have some things going for it. First, the iPhone 4S is significantly faster on AT&T. Second, it is the only company you can use both data and voice simultaneously. Third, with my employer discount, AT&T is actually cheaper then Verizon, Sprint, and T-Mobile.

If you are used to AT&T,  many switchers would be disappointed with both Verizon and Sprint’s data capabilities with the iPhone. When people began to understand that and research the costs, switching didn’t necessary become an obvious choice.

So much for all the predictions that iPhone customers would abandon AT&T in droves as soon as other US carriers got the iPhone.

Lee Dronick

I dislike AT&T. This largely has to do with it?s horrendous customer service

I thought that it was opposite day when I went into my local AT&T Store early this year. They were pleasant, helpful, professional, and knowledgeable, it was a nice experience. It has been the same every time I have been in there since. I think corporate was concerned that customers would leave them for other services, not just iPhone customers.

The only downside is they keep asking me about U-Verse. I am not switching from Time-Warner Cable TV until I see about this Apple TV thing to which Steve alluded before his passing. If it wasn’t for my wife I probably wouldn’t cable TV, I wouldn’t have unlimited texting either.

AT&T still needs to clean up their automated answering service from hell. Once I get hold of a real voice they are akin to an in store experience. I mention that every time I fill out a customer survey. Their website could be simplified as well.

moiy2

AT&T actually sold 6m smartphones (not Iphones) in the Oct-Nov period - extrapolated to 8.7m smartphones for the full quarter by Walter Piecyk, analyst at BTIG LLC. He further estimated that this would generate app. 5.3m Iphone sales in this quarter.

ctopher

If it wasn?t for my wife I probably wouldn?t cable TV

I love that you used cable as a verb. I don’t know if you did so intentionally, but it made me smile.

If you don’t cable TV will it fall over? (It doesn’t work to “antenna TV”, and that’s too bad.)

Lee Dronick

I love that you used cable as a verb. I don?t know if you did so intentionally, but it made me smile.

If you don?t cable TV will it fall over? (It doesn?t work to ?antenna TV?, and that?s too bad.)

Lee here, at the Fashion Valley Apple Store, I didn’t verb intentionally, but I see that it worked smile

TVs, and other stuff, falling are a very real possibility here in San Diego. The big fault lines are not real close, but we do have some locally and earthquakes centered nearby do happen. Big book cases and the TV center are fixed to the wall with hook and eye fasteners (so that I can move them for cleaning). I worry, a bit, about my iPad falling from the bed headboard shelf above my head and cleaving my skull.

I just bought my wife a pair of Isotoner SmartTouch gloves that work with the touch screens. They were on sale at JC Penny’s so I bought myself a pair as well. I also treated myself to a nice wool sports coat that was greatly marked down. Christmas presents, if I don’t pick out my own then they buy iTunes cards.

Jamie

I bought a 4S last week, and my local AT & T store only had one model left. There were other phones aplenty, Android or otherwise. Riding the subway in Manhattan recently (as well as walking down the street) all I saw were iPhones, and lots of them (though there were also a lot of people carrying Kindles). That’s a city of eight million people, and iPhones are positively everywhere. The stats we get never match what I actually see out and about. I know Android is selling big, but for the life of me, I never see the devices in the wild, and the age range for iPhones doesn’t seem to be quantifiable, these people were young, old, and in-between. And yes, I love my 4S. smile

Terrin

I thought that it was opposite day when I went into my local AT&T Store early this year. They were pleasant, helpful, professional, and knowledgeable, it was a nice experience. It has been the same every time I have been in there since. I think corporate was concerned that customers would leave them for other services, not just iPhone customers.

The only downside is they keep asking me about U-Verse. I am not switching from Time-Warner Cable TV until I see about this Apple TV thing to which Steve alluded before his passing. If it wasn?t for my wife I probably wouldn?t cable TV, I wouldn?t have unlimited texting either.

AT&T still needs to clean up their automated answering service from hell. Once I get hold of a real voice they are akin to an in store experience. I mention that every time I fill out a customer survey. Their website could be simplified as well.

Customer Service is fine at the Store. They work on commission. It is when you have a problem that it matters. Most problems have to be solved over the phone, even if you go to a store. For instance, AT&T recently advertised $19.95 high speed Internet for a year on it’s website, on local radio, and on local television. I signed up on the website, after typing in my address and AT&T verifying the deal was available in my area. AT&T sent me a welcome email, mailed the router, billed me for the service, and even set it up outside by sending someone to my house. It then canceled it the next day without informing me. Tech people in some foreign country tried over the phone to figure out why the service wasn’t working. They couldn’t. A day or two later some customer service person eventually figured out they made a mistake and it wasn’t in my area so they had canceled the service. I called up the friendly customer service people, showed them the website, and they couldn’t figure out any way to honor the agreement that clearly was listed in my area and I was sent the equipment for and billed. I went to the store, they made me call. A month later, calls to AT&T’s legal department, and my State Attorney General’s Office, I finally got it to honor the deal. At some point in the encounter, AT&T wanted me to travel about ten miles to drop their router off at a UPS Store even though AT&T made the mistake.

More recently, I talked with an online help person who wasn’t very helpful and who didn’t speak English very well. I wanted to know if I bought an iPhone 4S on a family plan with two lines and only got phone subsidized, would I later (like next year when the new iPhone comes out) be able to subsidize a second phone. The online person couldn’t understand my question. Eventually he said no. A person in the Store said yes. A person in another Store said he wasn’t sure.

So, yes the people in the stores can be friendly enough, but when you have an issue, which inevitably will be the case, you will be dealing with different people.


As far as cable goes, I have Comcast in my area. It is worst than AT&T. I ditched cable, had it cut out the cables, and now I just have DSL. I am richer and much happier. I can get anything I want to watch through Netflix, Huluplus, Redbox, the library, the HD antennae and the X-Box ESPN app.

Lee Dronick

Customer Service is fine at the Store. They work on commission. It is when you have a problem that it matters. Most problems have to be solved over the phone, even if you go to a store.

I have learned to ask for the Mac expert when calling even if it is a problem with my DSL. You don’t get someone reading from a script, “No son we don’t need to reinstall Windows, the problem is on your end.”

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