FQ4 iPad Sales

  • Posted: 24 July 2011 05:43 PM

    Apple sold sold 9.2 million iPads in FQ3, which represented a growth rate of 97% over FQ2.

    Supplier press releases indicate that they are now getting yields of about 5 million panels per month.  Ergo, if all other supply elements are comparable, then Apple could sell 15 million units this quarter.

    15 million units would represent a growth rate (QoQ) of 63%.  Putting personal biases (guaranteed to be nearly impossible to do), is that possible.  Should the growth rate even be considered?

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    Posted: 24 July 2011 05:49 PM #1

    Gregg, I’m of the YOY mindset when it comes to forecasting.  The compare is 4.19M iPads. 

    Apple will smash that number with little difficulty.  But iPad ramp-up to 15 million units?  If I were Apple and I had to choose between 28 million iPhones / 12 million iPads and 25 million iPhones / 15 million iPads, I’d tend to want to go after higher iPhone numbers.  To this day, there’s no credible iPad 2 competition, and given some parts in common (particularly the A5 SoC), given that Apple could never satisfy all theoretical demand for either iPhone or iPad, I think Apple would want to make sure iPhone was taken care of for this quarter (since iPhone 5 is “overdue”). 

    There’s also the question of iPad 2 seasonality.  I think there were hints of iPad seasonality in the fiscal Q2 numbers.  Since iPhone 5 may be less seasonal (you always need a phone), make sure it gets off to a good start, and then return some focus to iPad for a monster holiday season.

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    Posted: 24 July 2011 05:55 PM #2

    Brazil is a wildcard, but I’ll ask again, would Apple prefer more iPads or more iPhones?  I assume the A5 to be “modular” in the sense of you can apply it to either the iPad or iPhone without too much fuss. 

    The iPad competition doesn’t exist.  It’s all well and good to continue steamrolling the other tablet vendors, but I would put more focus on the hotly contested smartphone space.  When the Brazil factory is online, focus more on iPhone production.  More iPhone 5 supply will give consumers less reasons to move to/stick with Android.

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  • Posted: 24 July 2011 06:00 PM #3

    Mav - 24 July 2011 08:49 PM

    Gregg, I’m of the YOY mindset when it comes to forecasting.  The compare is 4.19M iPads. 

    Apple will smash that number with little difficulty.  But iPad ramp-up to 15 million units?  If I were Apple and I had to choose between 28 million iPhones / 12 million iPads and 25 million iPhones / 15 million iPads, I’d tend to want to go after higher iPhone numbers.  To this day, there’s no credible iPad 2 competition, and given some parts in common (particularly the A5 SoC), given that Apple could never satisfy all theoretical demand for either iPhone or iPad, I think Apple would want to make sure iPhone was taken care of for this quarter (since iPhone 5 is “overdue”). 

    There’s also the question of iPad 2 seasonality.  I think there were hints of iPad seasonality in the fiscal Q2 numbers.  Since iPhone 5 may be less seasonal (you always need a phone), make sure it gets off to a good start, and then return some focus to iPad for a monster holiday season.

    I don’t think its an issue of choosing one or the other.  They represent different production lines.  With Apple’s cash, supply shouldn’t be an issue either.

    We are way to early to determine seasonality with the iPad (3 more years).  The iPad is a new product in growth phase.  The dip (at the very least the extent of the dip) we saw in Q2, IMO, came about because of supply/production problems with the iPad.

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    Posted: 24 July 2011 06:32 PM #4

    Not entirely.

    Now, rumors were early this year that iPad 2 was delayed.  Remember that?

    That is, until Apple shut them down with the announcement on February 23.

    iPad 2 launched in March 11, to unknown sales figures before the quarter closed about 2 weeks later.

    So, what we have is no reason for iPad 2 sales to stop until February 23; Apple presumably increasing iPad points and countries of sale throughout; 2 weeks of a sales drop; and 2 weeks of initial sales.  Against the fiscal Q1 number of 7.33 million iPads sold.  Total iPads sold in fiscal Q2 were 4.69 million.

    Were we to assume minimal seasonality and Apple selling 3.5 million iPads through the first 6-7 weeks of fiscal Q2 (a fairly conservative number IMHO), do we then assume Apple could only cobble together about 1.2 million iPad 2s for launch and sale in the first 2 weeks?

    The only way I could reconcile the low number was iPad 1 seasonality.  There is just no way Apple would have initial sales of iPad 2 at the pace of 600,000 a week.

    [ Edited: 24 July 2011 06:34 PM by Mav ]

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    Posted: 24 July 2011 10:38 PM #5

    adamthompson3232 - 24 July 2011 08:50 PM

    If we assume production increased from April to May and May to June we can probably assume they produced 3.5M+ units in June. Then TC tells us that July production is greater than June so July is likely 4M+. I have 12M as the absolute floor and 15M as the reasonable but higher end of possibilities. but Brazil is coming online soon so who knows.

    +1 on these estimates. Likely closer to 15 million than 12 million.

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  • Posted: 26 July 2011 11:30 PM #6

    Unique - 27 July 2011 01:34 AM

    The growth in ipad is huge, just look at the % out of total sales. Amazing.

    Here’s John Gruber’s take:

    Apple is to the post-PC era what Microsoft and Intel combined were for the PC era. They control the dominant software platform and reap the majority of the profits from hardware. When people argue that Apple has somehow already grown as big as it can get, they?re not seeing the size of the opportunity that remains ahead. Imagine how big a combined Microsoft and Intel would have been 20 years ago. Then consider that the post-PC/mobile market is going to be bigger than the PC market.

         
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    Posted: 26 July 2011 11:48 PM #7

    Back to school, every school and every grade level from nursery school to grad school, drives us to 16 million.

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  • Posted: 27 July 2011 12:52 AM #8

    FalKirk - 27 July 2011 02:30 AM

    Here’s John Gruber’s take:

    Apple is to the post-PC era what Microsoft and Intel combined were for the PC era. They control the dominant software platform and reap the majority of the profits from hardware. When people argue that Apple has somehow already grown as big as it can get, they?re not seeing the size of the opportunity that remains ahead. Imagine how big a combined Microsoft and Intel would have been 20 years ago. Then consider that the post-PC/mobile market is going to be bigger than the PC market.

    Fiscal Q3/2010 Macs (combined desktop and laptop) outsold iPads by     6.2%
    Fiscal Q4/2010 iPads outsold Macs (combined desktop and laptop) by     7.8%
    Fiscal Q1/2011 iPads outsold Macs (combined desktop and laptop) by   77.3%
    Fiscal Q2/2011 iPads outsold Macs (combined desktop and laptop) by   24.8%
    Fiscal Q3/2011 iPads outsold Macs (combined desktop and laptop) by 134.3%

    Estimate:
    Fiscal Q4/2011 iPads will outsell Macs (combined desktop and laptop) by 257.5%
    Fiscal Q1/2012 iPads will outsell Macs (combined desktop and laptop) by 306.7%

    The only period iPads haven’t outsold Macs was its debut quarter.  The rate at which iPads outsell Macs is increasing - rapidly.

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    Posted: 27 July 2011 12:55 AM #9

    13.5M is probably way, way bigger than WS is forecasting (until starting around 14 days before earnings). 

    I’m in the 11M range (pretty conservative) for now.

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  • Posted: 27 July 2011 01:31 AM #10

    Schools and Enterprise are expanding the use of iPads at unprecedented (early adopter) rates.  These are both markets that don’t take kindly to indefinite delivery dates.  Apple most certainly knows this so as Horace said some ways back, it’s a question of production ramp.  I know it doesn’t add much to the discussion but I think we need to look at this differently then the iPhone roll-out which was both confined to consumers and certain countries only.

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    Posted: 09 September 2011 09:39 AM #11

    LGD iPad 2 panel shipments return to previous levels

     
    Latest news
    Max Wang, Taipei; Joy Wan, DIGITIMES?[Friday 9 September 2011]

    LG Display (LGD) has seen its LCD panel shipments for Apple’s iPad 2 return to previous levels after solving quality issues, industry sources said. Its shipments of 9.7-inch iPad 2 panels went back up to four million units in August, and will stay at a similar level in September 2011, the sources added.

    LGD’s shipments of iPad 2 panels declined siginificantly to 2.5-2.6 million unuits in July from the previous monthly volume of about four million units due to problems with the backlight units (BLUs), prompting Apple to source more from Samsung Electronics and Chimei Innnolux (CMI), the source said.

    Samsung shipped nearly two million units of iPad 2 panels in July while CMI’s volume reached 450,000-500,000, the sources added.

    Apple’s iPad 2 shipments are expected to reach 12-15 million units in third-quarter 2011, which will benefit its suppliers.

    Despite regaining orders from Apple, LGD has reportedly reduced its overall utilization rate due to sliding shipments of LCD TV and notebook panels.

         
  • Posted: 09 September 2011 11:52 AM #12

    pats - 09 September 2011 12:39 PM

    LGD iPad 2 panel shipments return to previous levels

     
    Latest news
    Max Wang, Taipei; Joy Wan, DIGITIMES?[Friday 9 September 2011]

    LG Display (LGD) has seen its LCD panel shipments for Apple’s iPad 2 return to previous levels after solving quality issues, industry sources said. Its shipments of 9.7-inch iPad 2 panels went back up to four million units in August, and will stay at a similar level in September 2011, the sources added.

    LGD’s shipments of iPad 2 panels declined siginificantly to 2.5-2.6 million unuits in July from the previous monthly volume of about four million units due to problems with the backlight units (BLUs), prompting Apple to source more from Samsung Electronics and Chimei Innnolux (CMI), the source said.

    Samsung shipped nearly two million units of iPad 2 panels in July while CMI’s volume reached 450,000-500,000, the sources added.

    Apple’s iPad 2 shipments are expected to reach 12-15 million units in third-quarter 2011, which will benefit its suppliers.

    Despite regaining orders from Apple, LGD has reportedly reduced its overall utilization rate due to sliding shipments of LCD TV and notebook panels.

    pats,
    The way I read these numbers is that the iPad production rate has been at about 6.5M units per month since August 1st, implying—contrary to the muted summary conclusion of the article—that FQ4 sales will be well above 15M and FQ1 sales at least 20M (more if the panel production rate can keep accelerating). Such a conclusion relies on two (I believe reasonable) assumptions: That display panels are the limiting factors for iPad production and that Apple is still selling every iPad it can manufacture.

    Reasonable conclusion?

    Alan

    Edit: Missed the above post while I was writing this one, which seems to confirm the conclusion I was working towards.

    [ Edited: 09 September 2011 11:56 AM by Hannibal ]      
  • Posted: 09 September 2011 11:57 AM #13

    adamthompson3232 - 09 September 2011 02:55 PM

    Hannibal, see the BGR link I just posted.

    Thanks, AT—I just caught it.

         
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    Posted: 09 September 2011 07:05 PM #14

    Hannibal - 09 September 2011 02:52 PM
    pats - 09 September 2011 12:39 PM

    LGD iPad 2 panel shipments return to previous levels

     
    Latest news
    Max Wang, Taipei; Joy Wan, DIGITIMES?[Friday 9 September 2011]

    LG Display (LGD) has seen its LCD panel shipments for Apple’s iPad 2 return to previous levels after solving quality issues, industry sources said. Its shipments of 9.7-inch iPad 2 panels went back up to four million units in August, and will stay at a similar level in September 2011, the sources added.

    LGD’s shipments of iPad 2 panels declined siginificantly to 2.5-2.6 million unuits in July from the previous monthly volume of about four million units due to problems with the backlight units (BLUs), prompting Apple to source more from Samsung Electronics and Chimei Innnolux (CMI), the source said.

    Samsung shipped nearly two million units of iPad 2 panels in July while CMI’s volume reached 450,000-500,000, the sources added.

    Apple’s iPad 2 shipments are expected to reach 12-15 million units in third-quarter 2011, which will benefit its suppliers.

    Despite regaining orders from Apple, LGD has reportedly reduced its overall utilization rate due to sliding shipments of LCD TV and notebook panels.

    pats,
    The way I read these numbers is that the iPad production rate has been at about 6.5M units per month since August 1st, implying—contrary to the muted summary conclusion of the article—that FQ4 sales will be well above 15M and FQ1 sales at least 20M (more if the panel production rate can keep accelerating). Such a conclusion relies on two (I believe reasonable) assumptions: That display panels are the limiting factors for iPad production and that Apple is still selling every iPad it can manufacture.

    Reasonable conclusion?

    Alan

    Edit: Missed the above post while I was writing this one, which seems to confirm the conclusion I was working towards.

    I think at his point in the life cycle of the iPad 2, the monthly run rate will not increase, so the 5-6 million per month figure from component suppliers likely includes components being stockpiled for the mammoth expected December sales.  so maybe take off 20% of that total for the actual per month sales rate.

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    Posted: 09 September 2011 10:50 PM #15

    IOS, I thought you were off on a 6 week drinking binge? tongue laugh

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