“Apple on Monday announced first weekend sales of the iPhone 5S and 5C. They ‘topped’ 9 million. Wall Street was expecting 5 to 6 million,” Philip Elmer-DeWitt reports for Fortune. “Big surprise, egg on faces. Estimates revised. Price points raised.”
“Then the second-guessing began [from analysts who were way, way off: Jeffries Peter Misek and Piper Jaffray’s Gene Munster]. How solid, some analysts asked, were those 9 million sales?” P.E.D. reports. “Coming to Apple’s defense was Goldman Sach’s Bill Shope… Apple this year used the same sales recognition rules it has always used. From an accounting perspective, this year’s 9 million is directly comparable to last year’s 5 million… The Core’s Matt Lew points out that Apple’s 9 million figure does not include any of the iPhones — tens of millions of them, he estimates — that were ordered online but have not yet been delivered.”
“Here’s what’s strikes me as strange about all this: No other smartphone manufacturer’s sales figures are subjected to this kind of scrutiny,” P.E.D. reports. “Samsung doesn’t get this kind of scrutiny because it doesn’t tell anybody — not analysts, not investors, not the SEC — how many smartphones it sells.”
Read more in the full article here.
MacDailyNews Take: Listen, Gene, Misek, et al., you blew it. It’s not the first time; it won’t be the last. Stop trying to cover it with mealy-mouthed excuses and own it.
Related articles:
Jim Cramer on 9 million iPhones sold in first weekend: Apple analysts were wrong; this could be AAPL’s launchpad – September 23, 2013
Apple destroys smartphone sales record: First weekend iPhone sales top nine million units – September 23, 2013
Agreed – own your mistake (its a big one to own) no spine means no trust which mean you will soon go away – we hope!
Egg on their Face? More Likely, they were Sh*t Faced.
Yeah, it’s more like android/google spooge on their lips. They just can’t get enough.
prout….
Why do the media and MDN publish these peoples comments and predictions ???
Why do we believe these people and take them seriously?
Time to learn and end this nonsense .
MDN you to blame for reporting these bozos rubbish to us , your readers
The media publishes these comments for three reasons: Manipulators, Manipulators, Manipulators.
MDN publishes them so we can have a laugh and develop an awareness.
They are believed and taken seriously because most people are socially engineered not to be critical thinkers.
MDN is to be praised for bringing both the tasty goods and the rubbish and an active discussion area to the readers, who in their own right are publishers of their own ideas here.
The quality of those posts does not rely with MDN or other bozos, it belongs to you and you have to freedom of choice to post rubbish or tasty goods.
Have a great day.
Wrong Pathdoc. These analysts have significant positions of power, sway, and influence based on the drivel they provide to their clients and the general public. People make investing decisions based on their “advice” and “knowledge” because they are held up as “experts” in their field.
MDN is rightly pointing out how amazingly wrong they are most of the time. If Gene Munster were even remotely correct, we all would be watching our satellite and cable-free Apple big screen 4K TVs three years ago, plus Apple would have half the money it does and warehouses full of unsold iPhones due to lack of demand and innovation.
Here’s a crazy idea, how about valuing Apple based on facts rather than guesswork?
The thing about the 5S is that “sales” were completely dependent on production levels. This was tipped off early on from the fact that they didn’t take pre-orders, which suggested supplies were going to be constrained for opening day.
Given the above, the analysts really should have been estimating Apple’s production, not the customer demand. I doubt any of these guys really knew Apple’s production capacity or stock plans for the opening weekend, which begs the question of why they were foolish enough to announce an estimate in the first place.
Luckily Apple came through in terms of having at least enough inventory to trounce the previous sales record. (It could have been they only had 3-4 million available on opening day and it would considered a huge failure, even though the true demand was still through the roof.)
The real question at this point is what is the true demand for these phones ? I still don’t think anyone really knows besides Apple (who is privy to the 5S online sales orders now.) It looks to me that the true demand at least early on is well above the 9 million that were sold/available the first weekend. (Meaning the analysts would have been off even more if Apple had sufficient stock available the opening weekend.)
Excellent points.
You ask who knows the true demand, and guess that only Apple knows. Well, I think in addition to Apple, the carriers know. They know what other phone launches (Apple and others) have resulted in.
I do not regularly check the AT&T (my carrier) site, but it seems to me that they are far more heavily promoting the iPhone right now than at any time in the past. That or they’ve figured out that since 5 of the 6 phones on my contract are iPhones they needn’t show me lesser phones!
And the amazing thing is that not one of the 9 million iPhones sold was an online order which had not yet been delivered. That’s tens of millions MORE sold.
Do these guys really think Samsung wouldn’t have been lumping all of that together into their “shipped” fuzzy math number?
i have started following P.E.D. recently. love his work. i don’t agree with everything he says, but he is not afraid to ask the questions and appears to be the more honest of journalists out there.
He started to see the light some time ago, and has edged away from the pack and its inbred groupthink. He has found higher ground.
…And if they have to smear and tear Apple down and lie and mislead the public, in order to obfuscate issues and detract from the focus , which right now is their bad short sight and lack of due diligence -well, that’s what they’ll continue to do, instead of new die diligence…
Wrongly linked as response…
Predict low, share price drops.
Buy low.
Act suprised when true numbers come home.
Good one Max. I think you nailed for a lot of what goes on. The big money Wall Streeters know the power of the Internet and how to extract money from the dupes that buy into their fleet of paid bashers. The manipulation game they’re playing is legal. There’s nothing illegal about scaring money out of an idiot investor that buys stock in something they know nothing about. It’s sad for sure, but I doubt anything will be done about it. And apparently there’s an endless trail of idiots that will buy high, panic on reading unsubstantiated BS, and sell low. Jaheezus
Apple provides sales data and analysts twist it to suit their own agendas. You can rest assured that if Apple’s sales numbers had been in the 5M to 6M range, then none of them would have questioned it because they would be “right.” Since they were wrong, they start attacking the data. Same old story.
The other vendors provide “shipped” numbers and, yet, their figures are routinely compared to Apple’s “sales” numbers. It just doesn’t make any sense.
In all my years at Apple I encountered only a couple executives for whom I could not have said their personality was founded in honor. Fred Anderson, Peter O., Steve Jobs, Tim Cook… these folks just don’t do things to mislead or tear down others. And Wall Street simply can not grasp what that means, leading to their judgment falling on the wrong side of most every Apple equation they dream up. Apple execs absolutely give consideration to what to say and what not to say, but the basis for that is keeping confidential (away from competitors) what needs to be kept confidential. Spending any time making stuff up is time taken away from working on the real stuff. And they don’t have time for that. We see it all the time in the monstrous execution that allows for records to be broken time after time, but I think people don’t want to see the truth that is staring at them: Ascribing evil intentions on these folks is a waste of time that could be used better to piece together what’s really going on, what’s coming next, where the nexus of R&D and consumer markets is meeting up. To purport that Apple would be cooking the books on first weekend iPhone sales is to not understand the all-consuming focus that is required to execute these kind of product launches.
If it had been in line with expectations, then they’d also have said that it’s *worse* when compared to last year since that didn’t include China.
They could’ve still tried to play that card after the 9+ million results, but they’d look stupid on top of poor analysis since it’s pretty obvious China couldn’t possibly have pulled in 40% of the weekend sales
Damn the Analcysts!
Not taken into account are the huge numbers of iPhones purchased in the first few weeks by individuals & groups intent on selling them overseas. It took three separate days of waiting in line get the phones my wife and I wanted and in each of those three days, I saw many of the same people grouped together camped out in the front of the lines who ultimately purchased two phones each for cash (off-contract) and leave with unopened boxes (they’re worth more that way). The only phones they were interested in purchasing were gold or silver (or space gray, if neither was available), AT&T (Verizon was their 2nd choice), and 16GB capacity. If those weren’t available, they’d take a 16GB iPhone attached to the other carriers available. A couple guys in one group told me they’ll line up every day for about a month and sit on them until they have enough iPhones to sell to their buyer, who buys from them in bulk for about $30,000 ($150-$180 profit per iPhone) before shipping overseas and selling them for double their face value. These guys mentioned that they recognized most of the faces in the first 30 people in line (all of whom buy two each) as those who’ve competed with them for spots in line the last few years. Standing in line to get a newly launched iPhone used to be a fun experience, but no longer. It’s a big racket now.
So, while the initial sales numbers may be extraordinary, the activation numbers on these phones are going to be significantly less.
First of all, I am Truth and I have been here a long,long time. Kindly change your username.
Second, Apple doesn’t make money from activations, they make money selling phones. You just told us they got full price, cash for them. BONUS! Welcome to “grey market” Apple gear happens to be the most lucrative in this space. Not sure what kind of point you are trying to make? Those phones will be activated somewhere. Ultimately, I don’t think Apple really cares. Why do you?
It appears you have neither the sense for business, nor public relations. The gray market, by (Wiki) definition, “…is the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.” Apple made sure that the new iPhones would be available the same day in China as the U.S. specifically to curtail gray market sales. Gray market sales are rarely good for manufacturers because the customers who buy those products don’t realize that said products cannot be covered by warranty.
You said the phones would be activated somewhere. Really? You mean there’s no market for unlocked phones worldwide? And if they are activated overseas, how many of these iPhones originally meant for AT&T, Verizon, Sprint, or T-Mobile will ultimately end up connected to any of these carriers in China, Russia, or India? Do you understand how much money is lost when these phones don’t end up in the hands of real customers in the U.S? Tim Cook made a point of mentioning that the 5C and 5S were going on sale in China the same day as the U.S. because of this years-long problem because Apple does care about their contracts with carriers in the U.S. and would prefer that phones built for their networks are used on their networks by their customers. Apple wants to make them happy and would prefer NOT to to see those phones shipped overseas. There are millions of legitimate customers who prefer the Apple Store experience who want to buy their iPhone in-store who are pissed off day after day because the phone they want isn’t available. And many, if not most, do not understand that it’s largely because of the gray market folks who have nothing better to do than make sure they’re first in line for specific phones. I was told by one individual who does this that they have to move from store to store for fear that the Apple Store employees will cut them off somehow.
If Apple could, at some point, control sales in the first few weeks to curtail the problem, I believe they would.
Lastly, you have no right of claim to your screen name any more than you have an exclusive right to your given name. I’ve been here using the name since the earliest days of MDN and have no intention of abandoning it.
No.. thats no egg on your face.
That was me farting.
I cancelled my 5S order placed within hours of its debut only to have to wait till mid-October while everyone I know has one already! Why? Because Apple is fkd up in how they distribute product which inexplicably seems to intentionally piss off consumers! Thx Timmy Boy!
“I cancelled my 5S order”
Not very believable.
But anyway – simple solution – Androcrap. I’m sure you can get one right away.
Well that Peter Misek misses estimates is no surprise, he lives on another planet to be honest. He should not really be allowed to cover Apple. I am surprised about that Munster was way off even though his faith has weakend the last year.
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However, what in regards to the bottom line? Are you positive concerning the source?