June Quarter iPad Unit Sales (Archive)

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    Posted: 13 May 2011 12:02 PM #31

    Three Guys and a PodCast

    market research firm Context is claiming 3G iPads are a disproportionately large chunk of the overall sales figures. In fact, Context claims the 64GB 3G iPad totaled a third of all iPad 2 sales in Europe since its launch. The surge in 3G iPad sales is likely to have pushed Apple’s average selling price (ASP) north, but to what extent?

    The last known ASP for iPads came during Apple’s January financial conference call, where Apple COO, Timothy Cook and Apple CFO, Peter Oppenheimer revealed a $600 figure. But Apple’s figure was from the Christmas quarter, when entry-level $499 iPads were likely high volume sellers (when compared to other quarters). If Context figures hold true beyond Europe’s boarders, iPad 2’s ASP for the June quarter will land somewhere around $680.

    $ 680 is in my ballpark.  I got 658 on my first estimate, but that gives too much weight to low-end iPads because there’s a separate spreadsheet cell for $ 499 iPads.

    That would be about a 20 cent EPS sandbag.

    [ Edited: 13 May 2011 12:15 PM by Tetrachloride ]      
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    Posted: 14 May 2011 06:45 PM #32

    499    0.22    109.78
    599    0.09    53.91
    699    0.13    90.87
    629    0.09    56.61
    729    0.13    94.77
    829    0.33    273.57
            
            
            679.51 

    Weighting the ASP in the most likely manners gives values between 675 to 680, given the 499 and 829 numbers mentioned in the story.

         
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    Posted: 14 May 2011 10:52 PM #33

    It is challenging to give much creedence to the Context firm’s estimate.  The ASP for the March quarter was $ 604.

    I agree that the smart buyer would go for as much memory as they can afford and that Apple is aware of a shift in buying patterns.

    The retail availability site “While Supplies Last” for Apple Store refurb section has a full listing of Macs, iPad 1’s and iPods.  This weighs on my estimates.

         
  • Posted: 15 May 2011 09:02 PM #34

    pats - 13 May 2011 01:34 PM

    If you want to further your knowledge here are couple detailed research papers on production ramp that I think cover most of the issues International product transfer and production ramp-up; a case study from the data storage industry and Learning and Process improvement during production ramp-up

    Thanks, pats!

         
  • Posted: 15 May 2011 09:49 PM #35

    Tetrachloride - 15 May 2011 01:52 AM

    It is challenging to give much creedence to the Context firm’s estimate.  The ASP for the March quarter was $ 604.

    I agree that the smart buyer would go for as much memory as they can afford and that Apple is aware of a shift in buying patterns.

    The retail availability site “While Supplies Last” for Apple Store refurb section has a full listing of Macs, iPad 1’s and iPods.  This weighs on my estimates.

    As the market for the iPad expands globally the ASP may soften until such time as the iPad is offered on a subsidized contract and/or the device becomes the primary hardware resource for users accessing the web and social networks.

         
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    Posted: 20 May 2011 10:48 AM #36

    Shaw Wu claims iPad production rates are accelerating via AppleInsider

    Analyst Shaw Wu with Sterne Agee said Friday that Apple has found better yields in iPad 2 production through retooling and conversion of more overseas production lines. These changes have gone a long way in addressing the supply issues Apple experienced last quarter.

    ...From our understanding, [Apple] still has a ways to hit the [second half] goal of 3-4 million units per month but getting closer,” Wu wrote.

    Accordingly, Wu has increased his estimates for iPad sales in the current, third fiscal quarter of 2011 for Apple. He now sees the company selling 6.8 million iPads, up from his previous prediction of 5.9 million.


    I think the big question mark for iPad numbers this qtr is the production ramp.

         
  • Posted: 20 May 2011 12:39 PM #37

    pats - 20 May 2011 01:48 PM

    Shaw Wu claims iPad production rates are accelerating via AppleInsider

    Analyst Shaw Wu with Sterne Agee said Friday that Apple has found better yields in iPad 2 production through retooling and conversion of more overseas production lines. These changes have gone a long way in addressing the supply issues Apple experienced last quarter.

    ...From our understanding, [Apple] still has a ways to hit the [second half] goal of 3-4 million units per month but getting closer,” Wu wrote.

    Accordingly, Wu has increased his estimates for iPad sales in the current, third fiscal quarter of 2011 for Apple. He now sees the company selling 6.8 million iPads, up from his previous prediction of 5.9 million.


    I think the big question mark for iPad numbers this qtr is the production ramp.

    Right now the biggest question mark is the reported explosion at the new Foxcomm plant

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    Posted: 20 May 2011 02:48 PM #38

    First off, hopefully the Foxconn “explosion” or whatever it is isn’t too severe.  We’re human beings first so I’m hoping for the best for those workers. 

    With time we may get slightly better info, but given the Foxconn-Apple connection I expect mass hysteria and misinformation to persist.

    As for iPad, is Foxconn the sole contract manufacturer?  Even if so let’s not forget “channel inventory.” Tim Cook’s target:  4-6 weeks.  If my supply chain understanding is correct that means any amount of channel inventory remaining represents product that can be sold if production is disrupted (not the intended use ordinarily, but a sales buffer) This of course assumes the “A05” building actually deals with iPad production.

    [ Edited: 20 May 2011 02:50 PM by Mav ]

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    Posted: 20 May 2011 02:57 PM #39

    Also:  this could be a material event for investors, who knows.  Will any of the WS “big names” ask Apple,  or will they make (stuff) up in the meantime?

    I’ve wondered about this before.  Apple may not be a particularly talkative company at times, but does anyone at WS ever bother to ask anything?

    (Apparently the WSJ hasn’t gotten comment from Apple yet, though media is a bit different than investors)

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    Posted: 20 May 2011 11:00 PM #40

    According to Abramsky, the plant is one of two primary manufacturing sites where the iPad 2 is produced, the other being Foxconn’s original Shenzhen facility. His sources disagree, however, about the two plants’ relative importance. Some believe the majority of iPads were being manufactured at Chengdu; others say that Chengdu was having trouble ramping up, and that the majority of iPads were still being manufactured in Shenzhen.

    http://tech.fortune.cnn.com/2011/05/20/what-the-foxconn-explosion-means-for-apple/?utm_source=twitterfeed&utm_medium=twitter

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  • Posted: 21 May 2011 06:06 AM #41

    Anyways , such incident won’t probably help to achieve the ramping up in production in the best possible conditions ..... :(  No idea how much it will impact that’s true but we will see ....

    A little thought for the 2 workers who died and the ones injured ...

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    Posted: 21 May 2011 10:14 AM #42

    afterglow - 21 May 2011 02:00 AM

    According to Abramsky, the plant is one of two primary manufacturing sites where the iPad 2 is produced, the other being Foxconn’s original Shenzhen facility. His sources disagree, however, about the two plants’ relative importance. Some believe the majority of iPads were being manufactured at Chengdu; others say that Chengdu was having trouble ramping up, and that the majority of iPads were still being manufactured in Shenzhen.

    http://tech.fortune.cnn.com/2011/05/20/what-the-foxconn-explosion-means-for-apple/?utm_source=twitterfeed&utm_medium=twitter

    As far as the production split.  My assumption is the original factory is still capable of producing 2.5m per month.  When it first opened in Novemember, Chengdu,  was producing 10k units per day with a max capacity of 50 lines and 40M per year.  The info I read was 2011 production target was 20M.  the last number I saw was current production was 30K per day.  I will look for the links.  The plant is offline at least until the fire inspection is complete so their will be some supply impact IMO.

         
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    Posted: 21 May 2011 03:12 PM #43

    I ask again:  “Channel inventory”?

    If none, immediate sales impact.  If some, delayed or modest impact.

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    Posted: 21 May 2011 03:43 PM #44

    Mav - 21 May 2011 06:12 PM

    I ask again:  “Channel inventory”?

    If none, immediate sales impact.  If some, delayed or modest impact.

    From CC

    channel inventory declined by 400,000 from the beginning of the quarter, implying sell-through of about 5.1 million. This resulted in ending channel inventory of below 850,000, which was below our target range of 4 to 6 weeks. We sold every iPad 2 that we could make during the quarter and would have liked to end the quarter with more channel inventory

    We drew the channel down on the current product or the original iPad, I should say, by 570,000 units during the quarter. And we added at the end of the quarter 170,000 of the new iPad 2s although most of that was in transit at the end of the quarter.

    If they are targeting 3M a month sales then inventory was about 2 weeks and most of that was in transit according to a later comment in the CC.

    [ Edited: 21 May 2011 03:51 PM by pats ]      
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    Posted: 21 May 2011 04:04 PM #45

    If ending channel inventory is 850k and we’re looking at a minimum unit sales of 7 million for the quarter, that’s about 1.45 weeks of channel inventory (.850 million / 7 million x 12 weeks).  I’d have to think Apple’s doubled that since then (Apple is rarely happy with even 3 weeks of channel inventory), and iPad availability has improved quite a bit.  I’m thinking Apple’s channel inventory should be at least in the 1.2-1.5 million unit range as of right now, so a “buffer” does exist, it’s just a very small one.

    I also ask again, out loud:  Has any WS Apple analyst actually tried to ask Apple if this event could be material to fiscal Q3 results, at least?  It’s certainly a fair question to ask.

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