“UBS’ Maynard Um has raised his own estimate of the number of iPhones Apple will sell in the 4th quarter to 30 million units instead of 28 million, reacting to an earlier report today at a UBS conference that AT&T is on track to handily beat its best-ever iPhone quarter of 6.1 million units, having already sold 6M in the first two months of the quarter,” MacNN reports.
“Um and Shaw Wu, an analyst at Sterne Agee, had already raised estimates earlier in the day in reaction to the AT&T news, sending out investor memos that estimated AT&T would move 7.2 million iPhones and 9 million smartphones overall to the end of the calendar year,” MacNN reports. “Wu raised his total estimate of iPhones sold in the quarter from 26 to 28 million, while Um has now moved to 30 million — but still called his guess likely to be ‘conservative.'”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]
They guys, as always, play typical bull game: they try to manipulate the market to higher expectations so their clients could sell of their stock right before Apple’s financial results, thus fixing the profits.
Stock prices after that fall, and then they tell their clients to buy shares when they still cheap — and start the game again.
Agreed. This constant ‘upping’ of their estimates until they over run the actual figure results in ‘disappointment’ in the market. The market punishes AAPL stock and keeps the price artificially low.
The only way to play this is to accept that this is how the market is playing it and buy and sell accordingly. Make money!
How much more incremental $2m of iphone would contribute to EPS?
In late October, articles were appearing in the press saying that parts, manufacturing and packaging costs for a 32GB iPhone 4s is about $215 (which is only about $10-15 more than a Kindle Fire, if you can believe that!).
On top of that, Apple has certain marketing and other incremental costs, which probably don’t amount to more than (say) $10-$20 per unit.
To be conservative, then, perhaps Apple has $350 in the phone altogether.
Apple sells that phone for about $650, including the amount paid by customers plus the payments received from carriers. An outright sale of the unlocked version of the phone generates $749.
So the profit from the phone is — again, I hope to be conservative — about $300+.
The cost of producing older iPhone models is lower and prices are lower, but I believe they are nearly as profitable for Apple as the 4s.
So if we assume $300 per phone on 2 million incremental phone sales … additional profits would be about $600 million.
Sorry, I forgot to convert that $600 million to EPS. With about 929 million shares outstanding, that adds about $0.65 to EPS.
I’m wondering how Shaw doesn’t get 30 million units conservatively with the data he’s looking at.
I wonder if he failed to correct his TOST analysis for PBAJ. Vectoring 28 million units w/o factoring PBAJ shows > one million unit *additional* margin of error on a LATTE curve.
I don’t know why Apple stock is not advancing. It’s not like they are a “beleaguered” company like RIM. But I sold my Apple this morning, because it’s not worth getting heart disease over.
Apple stock pump and dump. Why, oh why does this theme continue to happen over and over again. All it’s going to do is cause more “disappointment” over missed expectations and an accompanying drop in Apple’s already weakened share price. I think every analyst has tried every financial model possible to get a connection as to what Apple’s actual value is and every model varies wildly. Apple is worth somewhere’s between $300 and $500. That’s some gap.
I only hope I’m alive to see Apple hit $450 at some point. Maybe some time next year, hopefully.