How Many iPhones Did Apple Sell In The March Quarter?

  • Avatar

    Posted: 16 April 2012 04:11 PM #16

    rutgersguy92 - 16 April 2012 06:36 PM
    Mav - 16 April 2012 06:19 PM

    In case you missed it, PED notes that Zaky has opened a hedge fund.

    He’s accountable in ways he wasn’t before.

    Once you’ve made your mark?  “Gone corporate”, which is no bad thing?  This doesn’t surprise me one bit.  And this is not intended to be any kind of criticism of Zaky.

    So Andy must now toe the line with all of the “Professional Analysts”, he is no longer an “Independent”.

    Maybe so.

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 16 April 2012 04:33 PM #17

    Mav - 16 April 2012 06:19 PM

    In case you missed it, PED notes that Zaky has opened a hedge fund.

    He’s accountable in ways he wasn’t before.

    Once you’ve made your mark?  “Gone corporate”, which is no bad thing?  This doesn’t surprise me one bit.  And this is not intended to be any kind of criticism of Zaky.

    Oh, that’s complete B.S.  If you’re estimating #s do it without the friggin’ sandbag factor, please.

         
  • Avatar

    Posted: 16 April 2012 04:36 PM #18

    I’m being diplomatic Mercel. wink  I’ll let you tell it like it is today. :innocent:

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 16 April 2012 04:37 PM #19

    Won’t the market be surprised when the results are close to Corey’s number.

         
  • Posted: 16 April 2012 04:42 PM #20

    Mav - 16 April 2012 07:36 PM

    I’m being diplomatic Mercel. wink  I’ll let you tell it like it is today. :innocent:

    Diplomacy is overrated when it comes to WS shenanigans.  On the other hand, I don’t mind the low #, as it’s easier to hit a home run when you move the fences in behind second base…

         
  • Avatar

    Posted: 16 April 2012 04:43 PM #21

    Which is a lot like a lot of other independent analysts’ numbers, eh? smile

    Robert - what’s your 3-5 sentence response to Burgess’ very solid concern that China Telecom may not provide a VeriPhone-style bump to fiscal Q2 2012 iPhone unit sales?

    Personally, I think Verizon and China Telecom are not comparable situations.  There was no VeriPhone that worked until Feb 2011, but it was considered “old” then - and was at about 8 months old.  In China Telecom’s case, the iPhone 4/4S combo is only 4 months old.  I didn’t think the gray market factor saturated that market because it’s so new and should have robust iPhone demand.

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 16 April 2012 04:45 PM #22

    DawnTreader - 16 April 2012 07:37 PM

    Won’t the market be surprised when the results are close to Corey’s number.

    Robert, you just need to bump your # by 50,001 units to be the next sooooperstar… :-D

         
  • Posted: 16 April 2012 06:46 PM #23

    Mercel - 16 April 2012 07:45 PM
    DawnTreader - 16 April 2012 07:37 PM

    Won’t the market be surprised when the results are close to Corey’s number.

    Robert, you just need to bump your # by 50,001 units to be the next sooooperstar… :-D

    No problem. That’s a rounding error.  LOL

         
  • Posted: 16 April 2012 07:42 PM #24

    I don’t see the logic behind expecting iPhone units to increase sequentially.  Just doing a simple exercise- comparing key factors in Dec vs key factors in Mar- illustrates my belief.

    First, What drove iPhone sales in Dec? 1) New model 2) Holiday sales 3) Extra week in quarter 4) Adequate supply & rapid country rollout 5) Significant pent-up demand due to extra 3.5 months in refresh cycle.

    iPhone demand seen in earlier quarters was delayed, or pushed back to Dec period. And, iPhone demand typically seen in March period was pulled forward due to the extra week, adequate supply and available countries. Thus, some iPhone demand that would typically fall before & after Dec period, were pushed into that quarter.

    Second, Will the factors that drove demand in Dec apply to March? Short answer- No. Without those factors I would expect demand to fall considerably. Are there any factors new factors in March that would mitigate the absence of Dec factors? Yes. China demand and channel fill. However, those factors will only partially offset the decrease in demand.

    I know if you look back to sequential Q1-Q2 for last year, iPhone sales increased.  But 70% of the increase came from channel fill (1.7M) . Sell-through increased by slightly less than 1M units. We know Verizon accounted for 2.2M in additional sell-through. Also, that was when China Mobile activations began to explode after the carrier started offering micro SIM cards that could be used in unlocked iPhones. TC stated that two major factors were Verizon and China demand. Together, those probably represented 4M+ units in incremental demand. And since, ST only increased 1M, demand had to decrease 3M units elsewhere.  For example, AT&T activations fell 500K sequentially in Mar last year, after falling 1.1M in Dec from the peak in Sept with iPhone 4 launch. For this year, I expect March AT&T activations will fall ~3M from 7.6M level in Dec- which almost tripled from 2.7M in Sep.

    In the past, new iPhone launches, holiday demand, country & carrier expansion has been spread over different quarters. This go-around, those were all crammed into the December period. Imagine if we adjust Dec 10 numbers by taking the unit increase in Sept 10 (iPhone 4 launch) and add it to Dec 10 numbers? And if we take some from March 11 quarter (lowering it) and adding that to Dec 10?  We would have a huge Dec number and subsequent March numbers would be much lower. I think that hypothetical is characteristic of reality for this year.

    I just don’t believe it’s very likely that iPhone sales could increase. And, PO said on the Q1 call that they expect iPhone sales to drop sequentially.

    Signature

    Financial Alchemist

         
  • Posted: 16 April 2012 08:13 PM #25

    Turley, thanks for your reply.  My rebuttal:

    1.  When I suggest a sequential increase, it’s from the base of Dec. qtr times 13/14 weeks.  Perhaps Peter O. was taking that into account?  If you remove the 2.5M iPhones the extra week may have generated in sales, the March quarter only needs 35M for a sequential beat.  He may have been allowing for that. In other words, if he expects 36M iPhones, many would call this a sequential decline if one ignores the extra week. 

    2.  Apple could have sold more in the Dec. quarter, as per the conference call.  If you say that extra sales from the Sept. quarter were stuffed into the Dec. quarter, can we not say the same thing for the March quarter, due to production constraints of the Dec. quarter?

    3.  iPhones aren’t really Christmas presents are they?  I imagine there’s some upside from gift-giving, but it can be overstated IMO.  Sequential FQ2 iPhone sales have been higher than FQ1 sales and support this notion.

    4.  The cumulative iPhones sold prior to iPhone 4S release to existing customers is a huge # and to believe that Apple sold all it could to the customers on the upgrade cycle AND new iPhone buyers in one quarter (i.e. Dec quarter) is a stretch.  And this ignores the new markets open in the March 2012 quarter vs. March 2011.

    I believe Apple reports 35+M iPhones in FQ2 2012.

         
  • Posted: 16 April 2012 09:08 PM #26

    Good points Mercel-

    1- 35M isn’t a stretch, so I guess if you want to normalize Dec for the extra week, there could be a sequential increase in that case. However, if the extra week generated an extra 2.5M in sales, that would mean sales would be lower by 5M because Dec would be inflated by 2.5M and Mar would have been reduced by 2.5M.

    2- I agree, some Dec demand was pushed into the Mar quarter, so we should see considerable channel fill.  However, I don’t think it will offset the effects of the later launch.

    3- I agree, holiday spending on items such as smartphones is often over-emphasized. But, it does have an effect, especially when the week after Christmas is included. Sequential increases from Q1-Q2 don’t necessarily debunk the notion that iPhone sales benefit from holiday spending. AT&T has seen iPhone activations drop sequentially in every Q1-Q2 period. iPhone sales have increased sequentially, but that’s mainly been due to channel fill, carrier & country expansion, plus the benefit of having the week after Christmas.  And Dec not having iPhone launch and extra week.

    4- I totally agree. If Apple had sold to all current users and new iPhone users in Dec, then March iPhone sales would be effectively zero. That’s obviously not the case. However, December did see a huge number of iPhone upgrades due to the extra 3.5 months to the refresh cycle, creating pent-up demand. Thus, Dec iPhone sales were much higher than they typically would be under past 12M refresh cycles. So past Dec periods didn’t get this benefit which made the Q1-Q2 compare and beat easier.

    I am just saying I don’t believe iPhone sales will exceed 37M for the quarter. I am predicting slightly less than 34M.

    Signature

    Financial Alchemist

         
  • Avatar

    Posted: 16 April 2012 09:16 PM #27

    I am continually to struggle with my iPhone number and reserve the right to reduce it up until April 24.

    But, check out this data from fiscal 2010 onwards:

    Q1 2010 iPhone YOY growth rate:  100%
    Q2 2010 iPhone YOY growth rate:  131% > “avg.” of about 115% 1H fiscal ‘10
    Q3 2010 iPhone YOY growth rate:  61% - stolen prototype, transition, changeover to completely different process
    Q4 2010 iPhone YOY growth rate:  91% - continued difficulties ramping production, still no white iPhone
    Q1 2011 iPhone YOY growth rate:  86% - same, STILL no white iPhone
    Q2 2011 iPhone YOY growth rate:  113% - nothing that different except intro of “old” CDMA iPhone 4 > “avg.” growth of about 100% fiscal ‘11, oh and white iPhone 4 FINALLY arrives in late April
    Q3 2011 iPhone YOY growth rate:  142% - for a creaky old phone this is awfully good growth
    Q4 2011 iPhone YOY growth rate:  21% - Apple took this hit intentionally
    Q1 2012 iPhone YOY growth rate:  128% - spillover demand, but how much?

    Demand shifting can’t be ignored, but forecasting 33.8M iPhones is a bit low, 81% YOY growth, when Q2 has been a nice strong iPhone sales quarter for Apple historically.  I think iPhone 4S market oversaturation in China on the gray market for fiscal Q1 2012 just didn’t happen - see eggs thrown at the Apple Store in fiscal Q2.

    Forecasting 71M iPhones sold in 1H fiscal ‘12 results in a blended YOY growth rate of 104% (about 71M vs. 34.8M).  That’s still pretty good for sure.  But when I see the fiscal Q3 2011 number something tells me that the iPhone story still has plenty of legs.  Increased availability of the $0 3GS worldwide may also be an X-factor.

    I also wonder if it’s in Apple’s DNA to slow down production on new products.  “Didn’t bet high enough” and “decent quarter” sound bites from Tim Cook (CC, GS conference) are tough to ignore.  As is the 21% iPhone growth rate in fiscal Q4.  Not _all_ of the pent-up demand was shoved into fiscal Q1 2012.

    [ Edited: 16 April 2012 09:21 PM by Mav ]

    Signature

    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
  • Posted: 16 April 2012 09:32 PM #28

    turleymuller - 17 April 2012 12:08 AM

    Good points Mercel-

    1- 35M isn’t a stretch, so I guess if you want to normalize Dec for the extra week, there could be a sequential increase in that case. However, if the extra week generated an extra 2.5M in sales, that would mean sales would be lower by 5M because Dec would be inflated by 2.5M and Mar would have been reduced by 2.5M.

    2- I agree, some Dec demand was pushed into the Mar quarter, so we should see considerable channel fill.  However, I don’t think it will offset the effects of the later launch.

    3- I agree, holiday spending on items such as smartphones is often over-emphasized. But, it does have an effect, especially when the week after Christmas is included. Sequential increases from Q1-Q2 don’t necessarily debunk the notion that iPhone sales benefit from holiday spending. AT&T has seen iPhone activations drop sequentially in every Q1-Q2 period. iPhone sales have increased sequentially, but that’s mainly been due to channel fill, carrier & country expansion, plus the benefit of having the week after Christmas.  And Dec not having iPhone launch and extra week.

    4- I totally agree. If Apple had sold to all current users and new iPhone users in Dec, then March iPhone sales would be effectively zero. That’s obviously not the case. However, December did see a huge number of iPhone upgrades due to the extra 3.5 months to the refresh cycle, creating pent-up demand. Thus, Dec iPhone sales were much higher than they typically would be under past 12M refresh cycles. So past Dec periods didn’t get this benefit which made the Q1-Q2 compare and beat easier.

    I am just saying I don’t believe iPhone sales will exceed 37M for the quarter. I am predicting slightly less than 34M.

    A few comments:  If 2.5M iPhones produced in the Dec. quarter were booked as sales in Dec., then we may have 2.5M fewer iPhones sold in the March quarter.  I don’t see how that creates a 5M shortage in March (unless I’m misreading you). 

    My main point with #4 above is that I believe Apple sold all it could produce.  The unmet demand likely continued through the March quarter.  I also think Apple continued to ramp production as demand supported it, offsetting the impact of iPhones produced and sold in the 14th week of the Dec. quarter.  If you’re suggesting demand and supply reached equilibrium in the March quarter, then we’ll have to let Apple decide that for us next Tuesday. 

    And if Apple sold between 34M - 37M iPhones, I think you’ll agree the EPS # will take care of itself.

    [ Edited: 16 April 2012 09:38 PM by ByeTMO ]      
  • Posted: 16 April 2012 09:37 PM #29

    Mav - 17 April 2012 12:16 AM

    I also wonder if it’s in Apple’s DNA to slow down production on new products.  “Didn’t bet high enough” and “decent quarter” sound bites from Tim Cook (CC, GS conference) are tough to ignore.  As is the 21% iPhone growth rate in fiscal Q4.  Not _all_ of the pent-up demand was shoved into fiscal Q1 2012.

    I don’t know why Apple would consider slowing production in the first full quarter it was available (we agree).  Too, we’re a long 2 quarters away from the new one.  Tim’s comments reverberated with me as well.

         
  • Posted: 16 April 2012 09:43 PM #30

    FYI, a new change in iPhone commercial strategy…..using celebrities.  Just saw one aired with Zoey actress from the New Girl show…...and there’s also one with Samuel Jackson which you can see on Appleinsider.com.  Neither are on apple’s website yet.