Analyst predicts 14.1 million iPod units this quarter, Apple Computer shares hit all-time high

“Improved availability and continued upbeat demand for iPods on Wednesday prompted a Bear Stearns analyst to boost his earnings estimates for Apple Computer Inc., sending shares to an all-time high,” The Associated Press reports. “Analyst Andrew Neff’s comments quelled concerns that Apple might not be able to meet frenzied holiday demand for the newest versions of its music player, the nano and video iPods. Neff said shipment times have recently been scaled down to one to three days from a previous three- to five-day range.”

“The analyst now expects iPod volume to triple to 14.1 million units in the first quarter [Apple’s in the midst of their first quarter, (Q1 2006)], compared with an earlier estimate of 10.4 million. He also predicted annual volume will nearly double to 44.8 million, about 11 million more than previously thought,” AP reports. “For the fiscal first quarter, Neff raised his profit target to 69 cents per share from 52 cents — excluding items — and his revenue estimate by $1 billion to $5.85 billion. Annual earnings are projected to be $2.25 per share, up from a past view of $1.85 per share, on $21.3 billion in revenue. On average, analysts polled by Thomson Financial are looking for first-quarter income of 50 cents per share and $4.78 billion in sales, and full-year earnings of $1.78 per share on sales $17.66 billion.”

Apple Computer (AAPL) shares currently stand at $64.26, up $1.98 or 3.18% on volume of 20.4 million shares.

Full article here.

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Related articles:
Bear Stearns reiterates Apple ‘outperform’ rating, raises target to $70; AAPL hits new all-time high – November 16, 2005
UBS: Mac momentum continues building, Apple could sell 10 million iPods in holiday quarter – October 03, 2005

19 Comments

  1. I’ve got to be skeptial of the 14 million estimate. It’s quite a ramp up from the record 6.5 million iPod that Apple sold last quarter and even as a pro-Apple stockholder, somewhat incredulous compared to how many iPods sold this quarter last year.

    Heck, Apple has never sold 14 million of anything in a single quarter, much less something as complicated to manufacture as the iPod.

    If Apple does 10 million iPods this quarter, that would be hugely incredible. Heck, if it does just 8 million, that would still be mighty impressive.

    Regardless, just watch for an irrational sell-off like what happened last month if Apple somehow “misses expectations” because it ended up selling “only” 10 million iPods. Remember, the stock fell from $51 to $46 in an hour….a lot of people took the initiative to get AAPL cheap (including me) and now the stock is in the $60s. That’s a tremendous return in a month, and we have the so-called analysts to thank for that gift.

  2. MacObserver reports he met with Apple (Oppenheimer, Tevanian) on Tuesday. He asked questions. Apple likely answered with “no issue” (supply or demand), “on track”, and maybe a few “above our expectations”. Just like what they said on the Oct conference call about the nano but it’s now a whole month later (halfway through the quarter) and the 5G iPod and updated Macs are out.

    Unlike some other analysts that haven’t talked with Apple, he’s not a dummy. He read between the lines of the answers and updated his estimates.

    For some of you doubters, note that Apple has experienced more than double its iPod sales in previous 1Qs, although it was not at this scale.

  3. New technologies have adoption curves that often reflect exponential growth until saturation points are reached. Does anyone have an argument why the saturation point has been reached and sales should not increase dramatically this quarter?

    If this holiday quarter follows the pattern of previous holiday quarters, sales will be 2 to 3 times the previous quarter (I believe that was about 7 million). But I’ll be slightly conservative — let’s say sales might range fom 12 to 18 million units. 14 million seems a safe estimate.

    Factors contributing to large growth this quarter:
    – It’s a holiday quarter. Many businesses make the vast majority of their sales in this quarter.
    – The iPod and iPod nano are very significant upgrades: anyone who already owned an iPod has a good reason to consider buying a new one.
    – The iTMS is in more countries than ever.
    – More Apple Stores exist than ever, offering a compelling retail point for many consumers.
    – Apple has more 3rd party retailers for the iPods than ever.
    – The iPods have great new functionality, giving more reasons for people to buy who may have not considered one before. Video is the most obvious new capability, but there is also a brand new world clock, stopwatch, and lockout tool.
    – There are more iPod accessories than ever (I’m guessing on this one, but it seems a fair bet).
    – There are more iPod compatible cars than ever (and this is where a lot of people are listening to music).
    – Podcasts are a new use for iPods, and are growing in number and diversity on a daily basis.
    – We’ve been hearing news of a number of competitors dropping out or reducing their ambitions (Creative).

    What factors would persuade us to lower our estimates:
    – Apple had a lower estimate at the beginning of the quarter (was it 9 million?). This is the piece of information that I would take most seriously, as they presumably have more information about this than any of us.
    – Perhaps the market is saturated with iPods and all those who are capable of figuring out how to use them (requires some computer skills to manage a music library) and interested in doing so have already bought. The buzz from the people I know just doesn’t seem to validate this perspective.

    *** (I own some stock, so feel free to take what I say with a grain of salt.)

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