2011q1 Forecast

  • Posted: 22 October 2010 12:24 PM #16

    Mav - 22 October 2010 02:43 AM
    asymco - 21 October 2010 05:28 PM

    Ach, I’ve been slacking and you beat me to it.

    Here is my January forecast.
    iPhones: 16.2 million
    Macs: 4.1
    iPads: 6
    iPods: 18.9
    Music revs: $1400
    Peripherals: $572
    Software: $700

    Net sales: $25.2 billion
    Gross margin: 37.6%
    EPS: 5.87

    (Earnings growth: 60%)
    (slightly edited version here: http://www.asymco.com/2010/10/21/estimates-for-apples-first-quarter-earnings-january/)

    Very nice “conservative” estimate.  I might put GM a little lower, iPods a little lower, and iPhones and iPads a little higher.  In fact, I think you’ve left room for significant iPhone upside.  It’s gonna be a knockout quarter anyway, how WS reacts all depends on the analysts to some degree.

    It’s easier to forecast the January chatter than the sales.  I’m pretty sure we’re going to be right back where we were this quarter with a great deal of uncertainty as to how many iPads and iPhones they can actually get built.  The iPad is an absolutely amazing device but it’s price point lends itself more to a gift purchase (even if it’s to oneself) than it is to an impulse purchase.  It’s going to be the hit of the holidays as far as I can tell.

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    Posted: 22 October 2010 06:49 PM #17

    I’m not as enthusiastic for short-term potential just yet for the MacBooks. 

    In the medium term, the flash memory will prevail as a preferred choice for light users.  I think the Mac Pro & iMacs will have mainly hard disks.

    The flash chip for OS X installs/restores is a lot more convenient that a half-dozen dvd’s.  It remains to be seen how long it will take to kill off the optical drive entirely.

         
  • Posted: 22 October 2010 11:06 PM #18

    There are two events that will probably occur which could have a major positive impact on the next quarter’s results:

    1: A new OS for the iPad which will directly extend its functionality (printing and I am sure some other surprises as well);  and

    2: The new data center which should come on-line in December.  Although there will be no direct product sales from this in the quarter, the revelation of whatever grand plan Apple has in store for this should shake up the future of cloud computing.  It won’t be a me-too effort.

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    Posted: 22 October 2010 11:32 PM #19

    BillH - 22 October 2010 03:24 PM

    It’s easier to forecast the January chatter than the sales.  I’m pretty sure we’re going to be right back where we were this quarter with a great deal of uncertainty as to how many iPads and iPhones they can actually get built.  The iPad is an absolutely amazing device but it’s price point lends itself more to a gift purchase (even if it’s to oneself) than it is to an impulse purchase.  It’s going to be the hit of the holidays as far as I can tell.

    The iPhone uncertainty is over for me.  Apple can and will do everything in its power to keep ramping up production for the device.  14.1 million was well over all of our projections.  I think 16 million is a conservative, supply-limited number and Apple could do far better than that if capacity is high enough.

    iPad, well I’m sure it’ll be better than 4.17 million units.  My thinking is that most analysts will set an expectations floor of around 5 million because of the “intense disappointment” that iPad not being pie-in-the-sky caused.  I was way off on my iPad guess, but I don’t consider 4.17 million the least bit disappointing.  Still the fastest selling product in Apple’s history.  It’s when iPad sales trail off that a person gets “worried.”

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  • Posted: 23 October 2010 06:46 AM #20

    I’m a little more conservative than some on iPhone.  Yes 14.1m was supply-constrained, but it was also massively hyped in terms of pent-up demand from Q3, and the shortages themselves created something of a consumer frenzy.  There should be some consideration whether now that hype is fading, do we really know where the true demand figure sits?  Is it really over 100% higher than a year ago?

    Don’t get me wrong, I’m a massive AAPL bull.  I just don’t want to see expectations run ahead of reality again in Q1 because all it will take is one metric falling short of whisper to bash the stock again.  Anything above 16m units in my mind is a big big win.

         
  • Posted: 23 October 2010 11:02 AM #21

    Mav - 23 October 2010 02:32 AM

    I think 16 million is a conservative, supply-limited number and Apple could do far better than that if capacity is high enough.

    iPad, well I’m sure it’ll be better than 4.17 million units.  My thinking is that most analysts will set an expectations floor of around 5 million because of the “intense disappointment” that iPad not being pie-in-the-sky caused.  I was way off on my iPad guess, but I don’t consider 4.17 million the least bit disappointing.  Still the fastest selling product in Apple’s history.  It’s when iPad sales trail off that a person gets “worried.”

    Not knowing just what the capacity is was the point of my post.  I agree on the iPhone being less unknown but there is a large monetary value to the difference between the 16 million you’re being conservative with and the 18 to 20 I believe they could sell.  The iPad is the real mystery.  If the rumours of them ramping to 3 million a month have any basis in reality then we should be kicking around 8-9 million of them as a possibility.

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  • Posted: 23 October 2010 11:20 AM #22

    16.7 million iPhones would be about 91% more than sold in the year ago quarter.

    I’d be happy to see estimates no higher than that smile, even though China should be far bigger than the year ago quarter.

         
  • Posted: 23 October 2010 03:53 PM #23

    How Apple Will Avoid The Holiday Gadget Crunch

    An article about Apple’s supply chain management as it applies to the current quarter.  I thought it was a pretty good article.

    http://blogs.forbes.com/elizabethwoyke/2010/10/22/how-apple-will-avoid-the-holiday-gadget-crunch/

         
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    Posted: 23 October 2010 05:06 PM #24

    Guess-timating iPhone and iPad numbers will be considerably easier for fiscal Q1 with the benefit of the Q4 numbers and anticipated trends for the rest of Apple’s business.  Macs will probably grow between 25-35%, iPods will settle in the 17.5-19 million range, and all the other revenue items won’t contribute much, relatively speaking, towards the $23B guidance set.  After that, mix-and-match the two biggest iOS devices (iPad/iPhone) and things become much clearer.

    Just doing some very, very quick math with some reasonable projections (revenue estimates only):

    Mac - 4.2 million (25% YOY growth) @ $1250 ASP = $5.25B (+$380 mil sequentially)
    iPod - 18.9 million (-10% YOY growth) @ $164 ASP = $3.1B (+$1.62B sequentially)
    Other Music - $1.34B (15% YOY growth) (+$100 mil sequentially)
    Peripherals - $563 million (20% YOY growth) (+86 mil sequentially) 
    Software - $631 million (no change) (-$30 mil sequentially)

    Note at this point, we’re already at about $2.15 billion higher sequentially.  Before adding in the impact of iPhone and iPad growth (in other words, assuming iPhone and iPad sales have zero sequential growth), we’re at about $22.5B, which is within striking distance of Oppenheimer’s rev guidance.

    From here, the questions are:  how does Oppenheimer painfully extract the remaining $500 million or so of his guidance to meet the $23B number?  And how much higher can that number go?  With each iPhone or iPad sold contributing around $630 or so to Apple’s top line, it’d only take an additional 900,000 or so combined iPhone/iPad units sold to reach guidance.  Is it that much of a stretch to assume that for the holiday season, Apple will sell more than 4 million combined iPhones and iPads compared to last quarter (which gets us to just about $25B in revs)?

    [ Edited: 23 October 2010 05:10 PM by Mav ]

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    Posted: 23 October 2010 05:16 PM #25

    Sounds good to me.  Eventually, a new spreadsheet of AFB estimates will appear.

    Except—no EPS number ??  :bugeyed:

         
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    Posted: 23 October 2010 05:22 PM #26

    Just multiply predicted revs by, I dunno, .228 (which I think will be low on account of favorable tax rate and improved GM from last quarter due to increasing cost leverage).  That’s last quarter’s “revs to EPS” ratio, and a nice, conservative place to start.  From there we get $25B * .228 = $5.70EPS.  55% YOY EPS growth with pretty conservative numbers?  Not bad at all.

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  • Posted: 26 October 2010 11:19 AM #27

    adamthompson3232 - 26 October 2010 01:56 PM

    The top 10 toys for Christmas 2010, according to the report are:

    iPhone 4 (14%)
    iPod touch (13%)
    iPad (12%)
    Kinect for Xbox (6%)
    Zhu Zhu Pet Hamsters / Kung Zhu Hamsters (5%)
    Flip Video Camera (4%)
    Toy Story 3 Jet Pack Buzz Lightyear (4%)
    PlayStation Move (4%)
    LEGO Harry Potter Years 1-4 Video Game (3%)
    Barbie Video Girl (3%)

    If that is accurate, that is incredible.

         
  • Posted: 26 October 2010 05:13 PM #28

    “Just multiply predicted revs by, I dunno, .228 (which I think will be low on account of favorable tax rate and improved GM from last quarter due to increasing cost leverage).”

    Keep in mind also that Operating Expense, even though increasing in absolute dollars, will go down as a percent of Revenue.  In a Break Even Analysis this results in a greater portion of each sale going directly to the bottom line.

    You are correct that .228 will be low.  A Revenue factor would more accurately be .236.

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