Can Apple’s iPhone sales grow in holiday quarter?

“One the features of Apple’s recent earnings report for the fiscal fourth quarter ended September was that the company sold 6.9 million iPhones, many more than some analysts expected, and enough to push the company into the ranks of the world’s largest cell phone vendors, ahead of even mighty Research In Motion,” Eric Savitz reports for Barron’s.

“But the strong performance – and the rapidly eroding economic landscape – raises an interesting question: Can the company sell more phones in the December quarter than it did in the last quarter? On the one hand, we’re headed into the holiday selling season. But this is shaping up to be a Christmas season that only the Grinch could love, with sales expected to be the worst in years. Needham analyst Charlie Wolf, a roaring bull on Apple’s shares, noted in a report this week that of the nearly 7 million phones sold in the latest quarter, 2 million are in carrier inventories. He says that fact “suggests that iPhone sales might decline in the December quarter,” although he notes that the company is in the process of expanding distribution to 15 smaller countries, which could provide some offset,” Savitz reports.

“Investment research firm JRPG took a look at this issue today, with the help of Rethink Research, which tracks the wireless industry, and concluded that Apple could sell as many as 8 million iPhone in the quarter,” Savitz reports.

Full article here.

18 Comments

  1. @Chano,

    “Savitz is missing the point big time when he tries to guess whether Apple’s revenues will hit the mark in 1Q09.”

    True, except for the fact that he didn’t once even mention the word “revenue”. His post only speculates on what the unit sales will be in the December quarter.

    “This delayed recognition is the reason for Apple’s high revenue and earnings figures in the September quarter. It took everyone by surprise.”

    I don’t think Apple has ever once given revenue information on the iPhone without making it abundantly clear how they defer the revenue. There was no “surprise”. It follows that high iPhone unit sales one quarter will increase deferred revenue in following quarters and that a decline in iPhone unit sales in one quarter will result in less *growth* in deferred revenue than what would otherwise be expected.

    Savitz’s post was only talking about unit sales, and left the impact on deferred revenue math to the reader.

    If there’s any context in the article, it’s in regards to market share, as discussed by the last paragraph which includes, “…if the company were to to cut its price and trade some margin for market share, “the iPhone could effectively take over the smartphone market.”

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