Apple May Have iMac Shortfall, Plus New iMac Rumors

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    Posted: 31 May 2002 01:55 PM

    Morgan Stanley and Salomon Smith Barney have issued conflicting comments about Apple’s unit shipments for the current quarter.  See our full story for more information.

    Also somewhat pertaining is a story out of an Asian publication that says Quanta will be producing 17” and 19” iMacs for Apple.  It pertains in that it specifically says that Quanta will produce some 350,000 iMacs for Apple this quarter, far above what both Morgan Stanley and Salomon Smith Barney are saying that Apple will in turn ship.  See our full story for more details on that.

    Note that there is a thread in our main forum about the story itself.

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  • Posted: 31 May 2002 03:40 PM #1

    IMHO these numbers don’t make sense unless there is a production issue. A shortfall in shipments would be noticed through constrained supply in the channel. An ample supply of iMacs appear to be available. Remember, too, that this quarter Apple was meeting demand for a sginificant backlog in product.

         
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    Posted: 31 May 2002 10:14 PM #2

    I believe that Apple currently has very little iMac inventory in the Channel. 

    I agree that the numbers don’t make much sense, however.

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  • Posted: 31 May 2002 11:32 PM #3

    Increasingly Apple’s sales occur outside of traditional channels. The Apple retail stores, the Apple online store and dirtect from Apple education.

    It would be very difficult for anyone to accurately estimate Apple’s units sales from all sales centers 2/3s the way through a quarter without shipment reports, inventory reports and sales reports from both inside Apple and its major distributors.

    Besides, Apple is well known for shipping large amounts of porducts just at the end of the quarter to satisfy demand. There was virtually no inventory of iMacs in the distribution channel at the end of the last quarter and during the conference call with analysts Apple executives stated that the manufacturing rate of its products would satisfy the backlog of orders by the end of this month.

    By all accounts, anticipated softness in education already considered, Apple should have excellent quarter.

         
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    Posted: 01 June 2002 09:40 AM #4

    But don’t forget this bruhaha between Hon Hai and Quanta.  It seems that Hon Hai was withholding a component from Quanta so that they could land the whole iMac assembly deal from Apple.

    If there have continued to be production problems, that would explain Morgan Stanley’s worries.

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  • Posted: 02 June 2002 12:28 AM #5

    Ok. But even if production problems existed, there’s still more than 20 production days in the quarter, more than enough time to make up for any exisitng shortfall in supply.

    Unless iMac sales have seriously fallen off, there shouldn’t be a problem for shipments this quarter.

         
  • Posted: 02 June 2002 06:53 AM #6

    Demand

    I think the $64 question is whether demand has fallen off.

         
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    Posted: 02 June 2002 07:07 AM #7

    The Doc is right on the money, of course.  That is the US$64 question.

    I would be surprised if that was the case, though.

    Back to Morgan Stanley and Salomon Smith Barney: their biggest bone of contention is whether or not Apple was *supposed* to have shipped 300,000 iMacs during the quarter.  MS says yes, while SSB says they were only supposed to have shipped some 265,000 units.  Both firms think that Apple will sell from 225,000 to 250,000 (MS falls between the two with estimates of 235,000 units).

    With two Wall Street firms agreeing on the basic number it seems that there might be a basis for the estimates.

    Thoughts?

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  • Posted: 02 June 2002 09:12 PM #8

    If I recall, many of us were surprised at Apple’s low projection of 265k iMac shipments for the quarter. When the eMac was announced the number made much more sense. The eMac would take some sales from the new LCD iMac in education.

    Still, considering the lack of channel inventory on the iMac at the start of the quarter and the hefty backlog on April 1st, both factors should easily push Apple to met its conservative estimate for the June quarter.

    Apple’s distribution has changed dramatically in two years - the inhouse education sales force, the Apple retail stores and the evergrowing activity at the online store makes projections from traditional retail data obsolete. Apple’s inhouse distribution system does not report data intra quarter.

    From my own informal surveuy of retail outlets in my area, there is an ample supply of iMacs available at several stores. if there is an issue, I deon’t believe it’s production related.

    It’s quite possible Apple’s retail stores are taking sales from other large Apple resellers that report sales to monitoring survey companies. That would account for a drop in surveyed sales. I’d like to see the raw data used by the analysts to develop their sales estimates.

         
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    Posted: 02 June 2002 11:25 PM #9

    [quote author=“DawnTreader”]I’d like to see the raw data used by the analysts to develop their sales estimates.

    Aye, as I would.

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  • Posted: 06 June 2002 10:45 AM #10

    Please see the latest TMO coverage of analyst comments on the iMac shipment story.