How Many iPhones Did Apple Sell In The March Quarter?

  • Avatar

    Posted: 24 April 2012 11:33 AM #211

    Mav - 24 April 2012 02:18 PM

    AT, Twitter link would be great btw.

    This is Horace’s tweet:

    https://twitter.com/#!/asymco/status/194781432298749952

    Non-US as mix of total iPhones sold Q4 2009 to Q2 2011: 65% 69% 62% 63% 75% 69% 71% 72% 63%

    That drop to 63% in the last quarter should come back up to 70%+, now that most countries have the 4S available locally.  Notice the jump from 63% to 75% back in 3Q2010-4Q2010?  That’s the difference between the quarter of actual release of the new iPhone (the iPhone4 in this case), vs the next quarter, in which there’s full availability worldwide.

    This time around, that didn’t happen between 3Q and 4Q but between 4Q and 1Q, because the 4S was released in October vs June.  And, by chance, it seems it’s exactly the same percentage, 63%.  If there’s a repeat of those numbers, the number will jump back to 75%, which means that US was only 25% of iPhone demand, at least for the last three months.  That could mean, 40M iPhones sold worldwide in the quarter, assuming 10M sold in the US.

    Personally, I’m sticking with my 35M number.  Still has a pretty good chance, I think.

         
  • Posted: 24 April 2012 11:40 AM #212

    Mercel - 16 April 2012 07:33 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.

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

    Not sandbagging.  People just assume that.  We didn’t sandbag last quarter either.  I just don’t agree with the consensus.  I don’t agree with it on iPhones and don’t agree with it on iPads.  I have my reasons.  But not sandbagging.  I will be a tad bit more conservative in light of what happened in Q4 by listening more to Apple’s guidance.  But that has zero to do with our business.  If I was on Wall Street, I would be giving estimates that we felt were within a 5% margin of error.  That’s it.

         
  • Avatar

    Posted: 24 April 2012 11:41 AM #213

    This adds some good color to the ATT numbers.

    In other words, WS is over reacting as usual.

    http://www.appleinsider.com/articles/12/04/24/concerns_over_iphone_activation_totals_at_att_verizon_seen_as_overblown.html

         
  • Avatar

    Posted: 24 April 2012 11:52 AM #214

    Just saw some other analyst on CNBC with a $500 target on AAPL.  It was hilarious, even the hosts of the show were saying “really, with a 12 P/E, it’s overvalued?”.  I think these analysts are sticking their neck out, and hoping to get lucky, to be THE analyst that nailed the $500 price, when everybody else was predicting $1000+ prices.

    Remember, how Blodget did that with AMZN back in the day?  He “predicted” AMZN at $400, and when it did hit that, he was the go-to guy for AMZN opinions, analysis, etc for years afterwards.

         
  • Posted: 24 April 2012 12:00 PM #215

    andyzaky - 24 April 2012 02:40 PM
    Mercel - 16 April 2012 07:33 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.

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

    Not sandbagging.  People just assume that.  We didn’t sandbag last quarter either.  I just don’t agree with the consensus.  I don’t agree with it on iPhones and don’t agree with it on iPads.  I have my reasons.  But not sandbagging.  I will be a tad bit more conservative in light of what happened in Q4 by listening more to Apple’s guidance.  But that has zero to do with our business.  If I was on Wall Street, I would be giving estimates that we felt were within a 5% margin of error.  That’s it.

    If AZ is sandbagging, don’t think he would have the 2nd highest iPad #‘s. Hoping aapl rpts near his high estimate at least - shall find out shortly smile

         
  • Posted: 24 April 2012 12:12 PM #216

    andyzaky - 24 April 2012 02:30 PM

    I was fully aware of all of these factors.  I had reasons for believing we would see lower to mid 30M’s in iPhone sales.  I made a big case for it at Bullish Cross.  The sum of it is this.  6 million units that went to Q1 should have went to Q4. 

    So if you’re going to look at sequential seasonality between Q1 and Q2, you need to do so by backing out the artificially inflated iPhone numbers in Q1 which didn’t exist in previous Q1’s.  Take me for example.  I upgrade in fiscal Q1.  I never upgrade in fiscal Q1.  I’m a fiscal Q3 or fiscal Q4 sale. Never a fiscal Q1 sale.  And I’m sure that’s the case with a lot of people. 

    Those sales never existed in Q1 2011, Q1 2010.  So you can’t just look at the sequential seasonality and then automatically expect that sales should be higher in Q2.  That’s a very unsophisticated way of arriving at estimates.

    Obviously, I’m not accusing anyone of that.  But merely pointing out that in this case, looking at past sequential data is of little help giving the shift in when Apple decided to a launch the device. 

    Now I’m also fully aware of the fact that Apple launched the iPhone in a number of new countries this quarter.  That’s perfectly clear.  I’m also aware of the highly successful iPhone launch in China.

    I just don’t believe and didn’t believe that would off-set the decline that we would see in domestic sales as per what you just saw at Verizon and you saw at AT&T. 

    I’m not just being ultra conservative.  Look at my iPad estimates.  They are the second highest on the street.  While we do want to be conservative and will put out slightly more conservative numbers than in the past, it’s not by much.  We’re going to give estimates that we think will fall within a 5% margin of error of Apple’s earnings.

    But there is a lot more to the rationale of a 31.5M iPhone quarter.  I’ll see if I can cut and paste it here. 

    But I also feel that Apple could surprise in iPad which could off-set iPhone sales.  Bullish Cross also holds a high estimate of $$12.94 in EPS on $43.5 billion in revenues.  We put out similar high estimates ahead of Apple’s results last quarter which were within a 1% margin of error of Apple’s actual report. 

    The high estimates are based on detailed analysis of factors hidden within Apple’s guidance along with the possibility that Apple’s international sales could significantly offset any weakness in domestic sales.  Basically, we feel it is possible that sales in China and other partners can result in a much much higher number than expected.

    But we’re going to take the reserved position and let Apple beat us.  There is nothing wrong with that.  i would rather get beaten by Apple than miss. 

    We are super long going into the results by the way.

    EDIT: By the way, I hope everyone remembers that Apple guided down revenue by $4.5 billion this quarter.  That’s very very telling. People ignored that in Q4 and look what happened.  Why ignore that again?  You have to compare revenue guidance from one quarter to the next.  It’s so freaking important to being able to determine how Apple’s management feels about a particular quarter.

    My flip suggestion that you were going short was made ahead of learning your iPad # (and I said so to others).  I don’t see 15M iPads for other reasons I don’t see your 31M iPhone #.  But it’s always good to see analysts long AAPL going into earnings.

    A few comments: 

    1.  VZ and ATT activations only tell part of the story.  Actual sales are likely higher because I expect an increase in inventory levels. 

    2.  I’m expecting higher international sales of iPhone than you are given the launch cycle moving significant sales into FQ2.

    3.  I’m fully aware of Apple’s guidance practices.  And I know you realize the impact of 14 quarters in the Dec. quarter.  In fact, if you remove the extra week, I think Apple guided fairly consistently, even with the extra iPhone sales falling out of the Sept. quarter into the Dec. quarter.  The $4B guidance # doesn’t bother me in the least.

    I’m as bullish as you in any event.  Good luck.

    [ Edited: 24 April 2012 12:23 PM by ByeTMO ]      
  • Posted: 24 April 2012 12:18 PM #217

    All you have to do is follow Horace on Twitter to believe the iPhone number for the Q is going to be 35M+ fairly easily in my opinion.

    https://twitter.com/#!/asymco

         
  • Avatar

    Posted: 24 April 2012 12:39 PM #218

    Check us out!

    http://tech.fortune.cnn.com/2012/04/24/all-eyes-on-the-iphone-sales/

    There were a couple nuances unmentioned, but thanks, PED!

    Signature

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

         
  • Posted: 24 April 2012 12:42 PM #219

    The conversation around channel fill is an interesting one that seems to be mostly being overlooked in the panic.

    I just read the Q1 transcript, and Q1 iPhone channel inventory closed at about 6m, “below our target of 4-6 weeks on a forward looking basis”.  Assuming “forward-looking” is a little conservative and pitches at 32m/qtr, 5 weeks inventory is 12.3m. 

    That means 6m units needed to get channel to mid of target range, ON TOP OF what is sold out to customer demand in the hugely larger addressable market in Q2 vs Q1.

    I’m as twitchy as anyone, but the above makes me feel quite a bit better.

         
  • Avatar

    Posted: 24 April 2012 12:44 PM #220

    Scary numbers, Mav.    Cheers, PED.

         
  • Posted: 24 April 2012 12:54 PM #221

    LongAAPLsince02 - 24 April 2012 03:42 PM

    The conversation around channel fill is an interesting one that seems to be mostly being overlooked in the panic.

    I just read the Q1 transcript, and Q1 iPhone channel inventory closed at about 6m, “below our target of 4-6 weeks on a forward looking basis”.  Assuming “forward-looking” is a little conservative and pitches at 32m/qtr, 5 weeks inventory is 12.3m. 

    That means 6m units needed to get channel to mid of target range, ON TOP OF what is sold out to customer demand in the hugely larger addressable market in Q2 vs Q1.

    I’m as twitchy as anyone, but the above makes me feel quite a bit better.

    This is a very important point as well. I just can’t see how TC said on the call in late January that there was still backlog for iPhone and then they continued to add countries and carriers like crazy for the quarter yet somehow iPhone will be down sequentially? I just don’t understand how that is even possible. Did Apple really reduce production from December to January which caused the continued backlog in January? Who the hell would ever cut production 2-3 months after launch when dozens and dozens of countries are still coming online? I just don’t really see how that is even remotely possible. Then you add this point here about channel fill to get to 4-6 weeks and I think the iPhone number could actually approach some of the “ludicrous” estimates I’ve seen from some of the non-pro analysts. I’m sticking with my 37.000001 million estimate.

         
  • Avatar

    Posted: 24 April 2012 01:01 PM #222

    +1000!

    37.040001 AT, per Apple IIRC, but close enough. wink

    One way to look at it:  Apple makes the iPhone 4S available in fiscal Q1 to countries with 2.3-ish billion people, where 1B are established markets and about 1.2B (India) is actually a nominal market.  Now, iPhone 4S is available to countries with around FIVE billion people (some of the new markets are very small of course) with an insanely enthusiastic and a high-growth-potential giant market in China, along with Russia, Brazil, Indonesia.

    I don’t know if iPhones will be more like 34M but I do think it’s unthinkable for Apple to slow down production now.  I have to stay with my iPhone estimate in the face of this data.

    Signature

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

         
  • Avatar

    Posted: 24 April 2012 01:10 PM #223

    LongAAPLsince02 - 24 April 2012 03:42 PM

    The conversation around channel fill is an interesting one that seems to be mostly being overlooked in the panic.

    I just read the Q1 transcript, and Q1 iPhone channel inventory closed at about 6m, “below our target of 4-6 weeks on a forward looking basis”.  Assuming “forward-looking” is a little conservative and pitches at 32m/qtr, 5 weeks inventory is 12.3m. 

    That means 6m units needed to get channel to mid of target range, ON TOP OF what is sold out to customer demand in the hugely larger addressable market in Q2 vs Q1.

    I’m as twitchy as anyone, but the above makes me feel quite a bit better.

    Excellent post!  Was that Oppenheimer code for “we could have sold 43M iPhones in fiscal Q1”?

    How should analysts have projected fiscal Q2 in light of that?

    Signature

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

         
  • Posted: 24 April 2012 01:19 PM #224

    Are “PED’s” #r’s up to date? Horace tweeted out 35.4m this a.m., PED has him at 37.3. Personally, I like Deagol’s way of best estimate by how many can they produce.

         
  • Posted: 24 April 2012 01:35 PM #225

    Mav - 24 April 2012 04:10 PM
    LongAAPLsince02 - 24 April 2012 03:42 PM

    The conversation around channel fill is an interesting one that seems to be mostly being overlooked in the panic.

    I just read the Q1 transcript, and Q1 iPhone channel inventory closed at about 6m, “below our target of 4-6 weeks on a forward looking basis”.  Assuming “forward-looking” is a little conservative and pitches at 32m/qtr, 5 weeks inventory is 12.3m. 

    That means 6m units needed to get channel to mid of target range, ON TOP OF what is sold out to customer demand in the hugely larger addressable market in Q2 vs Q1.

    I’m as twitchy as anyone, but the above makes me feel quite a bit better.

    Excellent post!  Was that Oppenheimer code for “we could have sold 43M iPhones in fiscal Q1”?

    How should analysts have projected fiscal Q2 in light of that?

    Yes, indeed!  Apple did not quantify the amount “below our target 4-6 weeks….”  Let’s say they were at 3 weeks and further assume Apple gets to 5 weeks of channel at end of March quarter.  That’s approx. 5M extra phone sales.  (32M/13 weeks * 2 weeks) to third party resellers like ATT, VZ, and world wide.