FQ2 iPad Unit Sales (Revisited)

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    Posted: 20 March 2011 03:49 PM #31

    DawnTreader - 20 March 2011 06:40 PM

    The iPad is not the bread and butter product for FQ2. I’m less concerned about current events and more concerned about the tablet market itself. Outside of the Apple iPad it currently doesn’t exist.

    Feeding off your statement that you are more concerned that there is no tablet market other than Apple, why is that a bad thing?  Are you a Motorola shareholder and worried about the Xzoom?

         
  • Posted: 20 March 2011 04:23 PM #32

    DawnTreader - 20 March 2011 06:25 PM
    FalKirk - 20 March 2011 06:14 PM
    DawnTreader - 20 March 2011 06:06 PM

    The release of the Motorola Xoom prompted Apple to announce and release the iPad 2 in the March quarter. The iPad 2’s release most likely destroyed Motorola Mobility’s ability to build any kind of sales momentum for that product.

    I don’t know about that. Moving up a release date in order to destroy the minuscule sales of an insignificant competing product seems very petty and very short-sighted to me. I’d like to think that Apple is more of a long-term thinker than that.

    It’s not petty. It’s economic war (you like those analogies).  :wink:

    Lord help me, I surely do!  tongue laugh

    DawnTreader - 20 March 2011 06:25 PM

    The Xoom is overpriced and was shipped prematurely. Still, it was (and I’m using past tense for a reason) the first credible competitor for the Apple iPad. If the market for the product (or its potential market) is destroyed, it removes competition and dissuades developers from investing resources in the product or platform.

    I don’t know. First, I’m not sure that Apple would change it’s release date in response to a competitor. I think their own internal logistics would take preference to a superficial tactical advantage. Second, while I acknowledge that the timing of the iPad 2 has all but torpedoed Xoom sales (see how I keep slipping those military analogies in there?) I don’t think it’s going to stop the armada of Android based iPad copycats. Apple may have sunk the lead ship, but that fleet has sailed and it’s on its way.

    DawnTreader - 20 March 2011 06:25 PM

    The market will soon discover the primary driver of Android handset sales in the US (Verizon) learned the hard way the iPhone is a much better product for purposes of customer satisfaction, customer loyalty and customer growth.

    I know I’m using strong words here…

    And I love it. grin

    DawnTreader - 20 March 2011 06:25 PM

    ...but I think the Verizon iPhone has dampened demand for Android handsets from customers on that network and will put even greater price pressure on Android handset makers in competition for unit sales.

         
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    Posted: 20 March 2011 04:31 PM #33

    DawnTreader - 20 March 2011 06:06 PM
    adamthompson3232 - 20 March 2011 05:18 PM
    iphoned - 20 March 2011 05:04 PM

    >>nothing

    I guess I don’t understand why they could’t wait till April with the launch and thus avoid q2 sales issues and build up iPad2 supply inventory at the same time. 

    Something just doesn’t add up here..

    Makes zero sense to wait launch. Tell me why you wouldn’t launch as soon as you had at least a few hundred K units built.

    Ordinarily Apple doesn’t release product refreshes with significant inventory of older models remaining in the marketplace. Price protection contract clauses can be expensive and Apple prefers not to see the company’s products discounted.

    I suspect one or two (or a combination of the two) causes led to the March release with significant channel inventory of the original iPad remaining in the pipe. Sales of the original iPad slowed significantly as speculation of the iPad 2 became common.

    The release of the Motorola Xoom prompted Apple to announce and release the iPad 2 in the March quarter. The iPad 2’s release most likely destroyed Motorola Mobility’s ability to build any kind of sales momentum for that product.

    DT

    Agree Apple was going on offense and preventing any Xoom sales momentum, but what leads you to the conclusion that there was significant channel inventory.  At the CC it was normal inventory and I’m sure they adjusted production since the lines producing iPad2 are probably the same as IPad1.  If we assume they have some machine downtime to transition production they would build up some extra and by cutting the price they make the Samsung 7” tablet expensive compared to iPad 1 for those looking for a low cost tablet.

         
  • Posted: 20 March 2011 05:34 PM #34

    iphoned - 20 March 2011 05:45 PM

    >>Makes zero sense to wait launch. Tell me why you wouldn?t launch as soon as you had at least a few hundred K units built.

    because you kill existing product sales withou having enough new product to meet demand and you do so at the end of the quarter without room to make up the sales.

    TC stated that Apple had 4-6 weeks inventory.  It takes ~4 weeks to work out the kinks in an assembly line, then you have to produce initial inventory before the launch.  So Apple gets to produce 2-3 weeks of inventory BEFORE launch.

    The best time to do all this is during the slowest quarter of the year (hmmm, that would be the March quarter).

    Bottom line is that Apple did not/has not sacrificed sales of iPads (regardless of model) BECAUSE they had inventory to carry them during the changeover.  Any perceived shortages isn’t because of the changeover, its because the new mode has generated greater desire for the product.

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  • Posted: 20 March 2011 05:35 PM #35

    iphoned - 20 March 2011 05:45 PM

    >>Makes zero sense to wait launch. Tell me why you wouldn?t launch as soon as you had at least a few hundred K units built.

    because you kill existing product sales withou having enough new product to meet demand and you do so at the end of the quarter without room to make up the sales.

    TC stated that Apple had 4-6 weeks inventory.  It takes ~4 weeks to work out the kinks in an assembly line, then you have to produce initial inventory before the launch.  So Apple gets to produce 2-3 weeks of inventory BEFORE launch.

    The best time to do all this is during the slowest quarter of the year (hmmm, that would be the March quarter).

    Bottom line is that Apple did not/has not sacrificed sales of iPads (regardless of model) BECAUSE they had inventory to carry them during the changeover.  Any perceived shortages isn’t because of the changeover, its because the new mode has generated greater desire for the product.

    “Error Message:  Unable to receive your submission at this time”

    Doing it again.

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  • Posted: 20 March 2011 05:52 PM #36

    madmaxroi - 20 March 2011 06:49 PM
    DawnTreader - 20 March 2011 06:40 PM

    The iPad is not the bread and butter product for FQ2. I’m less concerned about current events and more concerned about the tablet market itself. Outside of the Apple iPad it currently doesn’t exist.

    Feeding off your statement that you are more concerned that there is no tablet market other than Apple, why is that a bad thing?  Are you a Motorola shareholder and worried about the Xzoom?

    The iPad 2 and Motorola Mobility’s impatience in not fully baked product have doomed the Xoom.

    In my view a consumer tablet market does not exist outside of the Apple iPad. Expectations can run ahead of results. The Apple iPad in my view is an expansion of Apple’s multi-device paradigm and has achieved success in large part due to the depth of content available through the various iTunes stores. It’s not a product that in and of itself has created a market but has broadened the scope of the iOS product paradigm.

    M concern is not the product. It’s the expectations surrounding the product. I have no doubts the Apple iPad will have an increasingly important role in Apple’s quarterly performances. But there’s no reason to rush expectations.

         
  • Posted: 21 March 2011 02:13 AM #37

    >> BECAUSE they had inventory to carry them during the changeover

    How did you arrive at this conclusion,please?

         
  • Posted: 21 March 2011 02:19 AM #38

    >>The iPad is not the bread and butter product for FQ2. I?m less concerned about current events and more concerned about the tablet market itself. Outside of the Apple iPad it currently doesn?t exist.

    - would’t iPad be 2nd largest revenue contributor by now?  How is that not bread and butter? At least bread?

    - why the concern about the tablet market?  From the Apple’s perspective, who cares if there is one outside of iPad?

         
  • Posted: 21 March 2011 02:33 AM #39

    iphoned - 21 March 2011 05:19 AM

    >>The iPad is not the bread and butter product for FQ2. I?m less concerned about current events and more concerned about the tablet market itself. Outside of the Apple iPad it currently doesn?t exist.

    - would’t iPad be 2nd largest revenue contributor by now?  How is that not bread and butter? At least bread?

    - why the concern about the tablet market?  From the Apple’s perspective, who cares if there is one outside of iPad?

    In the December quarter iPhone revenue growth exceeded total iPad revenue and this quarter the iPhone will again contribute revenue growth totals greater than the iPad’s total revenue production for the quarter. Again this quarter the Mac revenue total will exceed the iPad’s revenue total. Please see this Eventide post for more information.

    The issue of the market for tablets (or lack of a market) does create challenges as well as opportunities. My point is the Apple iPad is an expansion of the iOS multi-product paradigm and is being sold and adopted accordingly.

    Unit sales expectations need to be developed in the context of Apple’s overall product strategy and overall product sales strategy. The Apple iPad was neither developed nor is it sold in a vacuum.

         
  • Posted: 21 March 2011 02:47 AM #40

    >>Again this quarter the Mac revenue total will exceed the iPad?s revenue total. Please see this Eventide post for more information.

    17% of revenue in q1 that’s huge for the fastest growing product, especially against the backdrop of iPad-less comparison quarter.  If iPad sales miss expectations, Apple better hope the WS believes the transition story.  The way stock is priced, WS is just looking for any signs of a slip…

         
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    Posted: 21 March 2011 12:07 PM #41

    iPad 2 international launch, round 1, is still on schedule for Friday, 4 days from now.  Some of this may take place during Wall Street trading hours.

         
  • Posted: 21 March 2011 12:19 PM #42

    iphoned - 21 March 2011 05:47 AM

    >>Again this quarter the Mac revenue total will exceed the iPad?s revenue total. Please see this Eventide post for more information.

    17% of revenue in q1 that’s huge for the fastest growing product, especially against the backdrop of iPad-less comparison quarter.  If iPad sales miss expectations, Apple better hope the WS believes the transition story.  The way stock is priced, WS is just looking for any signs of a slip…


    What are Wall Street’s expectations on iPad unit sales for the quarter? Beyond that, what are your unit sales expectations for the quarter. You express concern but what are your expectations?

         
  • Posted: 21 March 2011 12:27 PM #43

    I read a comment to a post, maybe on Horace’s site, that suggested the move from laptop/desktop computers to tablets would represent a shift similar to that from cassette tapes to CD’s during the 20th century.

    I am about 30% on the way to buying that.  A couple of years ago the Morgan Stanley Mobile Internet research report solidified my thinking on Apple as a mobile platform company.  The possibility that Apple is best positioned to benefit from the type of shift that the commenter was thinking of is a serious one, particularly when considering the wealth creation that would occur if half-true, even.

         
  • Posted: 21 March 2011 12:44 PM #44

    roni - 21 March 2011 03:27 PM

    I read a comment to a post, maybe on Horace’s site, that suggested the move from laptop/desktop computers to tablets would represent a shift similar to that from cassette tapes to CD’s during the 20th century.

    I am about 30% on the way to buying that.  A couple of years ago the Morgan Stanley Mobile Internet research report solidified my thinking on Apple as a mobile platform company.  The possibility that Apple is best positioned to benefit from the type of shift that the commenter was thinking of is a serious one, particularly when considering the wealth creation that would occur if half-true, even.

    Again, the iPad must be viewed as an extension of Apple’s iOS multi-product paradigm. If there was a market for tablets outside of the iPad, consumers and enterprises would have been using Microsoft’s model for years - a PC OS crammed into a tablet form and the requisite stylus to make it work.

         
  • Posted: 21 March 2011 12:58 PM #45

    iphoned - 20 March 2011 03:59 PM

    If the are quoting 4-5 weeks delivery, then those will be for q3.

    Half of those sales will take place during the March quarter.

    Telling us there is a disconnect between order date and delivery date is a good thing.  It means that when running at full capacity Which we already know is, at minimum, 7,331,000 and Apple can’t satisfy demand.  I am beginning to think 9.2 million isn’t that far fetched.

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