Analyst Sets Q1 iPhone Sales at 48M, iPad at 20M

| Apple Stock Watch

When Apple announces its first fiscal quarter earnings for 2013 on January 23, Wells Fargo's Maynard Um expects the company to report selling 48 million iPhones and 20.2 million iPads. iPhone sales would've been even higher, according to his estimates, had cell service providers offered more flexible upgrade options for existing subscribers.

Maynard Um predicts 48 million iPhones sold during Apple's first fiscal qaurterMaynard Um predicts 48 million iPhones sold during Apple's first fiscal quarter

"We are making minor adjustments to our revenue to adjust for lower iMac units given a later than expected ship date and constraints early on but raising iPhone forecasts to 48 million from 46 million, a quarter of which could be iPhone 4S/4," he said. "While there seems to be some concern around competition and diminishing demand, had some operators not been as restrictive on upgrades relative to past new product launches, Apple would have experienced an even stronger launch."

Mr. Um added that he expects about half of his projected 20.2 million iPad sales for the quarter will be iPad minis.

Concerns that iPhone 5 sales are weak should fade this year as Apple's parts suppliers improve production. "The difficult compares [to the iPhone 4S launch] should start to ease as we enter the back half of the year and our expectation for similarities between an iPhone 5S and 5 (though we think still innovative with fingerprint authentication technology, etc.) should allow for improving gross margins and against easier compares. We expect this, combined with improving supply chain data points into a new iPhone launch, to reverse sentiment," he said.

Mr. Um said he is expecting Apple to report US$53 billion in revenue for the December quarter with a $13.67 EPS, up a penny from his earlier estimates. Looking to the March quarter, he sees Apple's revenue at $44.7 billion, down from his $46 billion estimate, based on iPhone sales coming in at 39 million units instead of his earlier 43 million unit estimate.

Mr. Um also extended the low end for his target price range for Apple's stock from $710 to $680. His high end remains at $730. He is maintaining his "Outperform" rating. Apple is currently trading at $500.87, down 1.81 (0.36%).

Apple's first fiscal quarter earnings report is scheduled to start after the market closes on Wednesday, January 23. The Mac Observer will be hosting our usual live event coverage, so be sure to check in for the latest news from Apple.

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Constable Odo

Knowing how Wall Street has been responding to whatever Apple does, it really looks bleak for Apple shareholders.  I don’t think Apple will ever be able to do enough to move the stock upward to any degree.  Not unless it invents a time machine or flying car.  All these hedge fund investors want Apple to do the impossible and so Apple can’t possibly meet those sort of expectations.  The share price is likely to fall even if Apple has a decent quarter.  Apple won’t be able to increase the share price by merely selling hardware since it can never acquire major market share.  Apple would probably be better off adding a couple of non-hardware businesses to boost its revenue stream.  It’s likely all those unlucky investors who bought Apple in the $600 range will never see their money again.


Mr. Um is probably not all that far off the mark. Let me show you. On 6/11 apple reported over 400M app store accounts, on 9/19 435M and on 1/7 over 500M. For Q3 apple reported 43M iDevices (iPad and iPhone, iPod excluded). Q4 delivered 41M iDevices. By doing some dimensional analysis you will find that there are about 1.3 (iDevice/App) new iDevices for every new App Store account. Extrapolating those figures to the current quarter delivers 69.1M iDevices, revenue of 58.4B and profit of 14B. The upside surprise will occur provided sales actually slowed a lot after christmas. On the upside look for 82.9M iDevices with revenue of 70B and profit of 16.8B.

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