“UBS’ iPhone Monitor predicts that Apple could sell 70.9 million iPhones if they can be built and delivered before Saturday, December 27, the last day of Apple’s December quarter,” Chuck Jones writes for Forbes. “The 70.9 million iPhone units is above what appears to be the sell-side’s 64 to 65 million projections but I suspect that buy-side analysts (the ones that have to decide what Apple will really report so as to determine if they should invest in the stock) are more in the 67-68 million range due to the strong demand the iPhone 6 and 6 Plus are experiencing.”
UBS’ Apple analyst, Steve Milunovich “is raising his iPhone unit estimate from 63 to 67 million and not 70.9 million due to supply constraints,” Jones writes. “I believe that Apple could hit 70 million iPhone sales and the demand for them can be seen in their leading positions they hold in Japan, lead-times being longer than other iPhone launches, China Mobile’s explosive 4G growth and Kantar’s data showing iPhones gaining share worldwide.”
“His checks indicate that iPhone production for the March quarter has not materially changed even though there have been rumors to that effect,” Jones writes. “He is expecting a 40% sequential decline but that is to be expected due to the very high demand in the December quarter and that most of that will occur in the iPhone 6 since he believes the 6 Plus is experiencing stronger than anticipated demand.”
Read more in the full article here.
These analysts (and the investors who apparently listen to them) must be stupid. There is no “magic” deadline to sell X number of iPhones by a certain date. Any iPhones not sold by the end of December due to “supply constraints” will eventually be sold… It does not really matter which quarter gets the revenue and profit.
For a “commodity” Android phone maker, such issues DO make a difference. If there is actually a believable scenario where Samsung experiences “supply constraints” for a smartphone model, that IS a major problem, because the customer can easily buy a competitor’s similar Android smartphone instead. The sale it deferred “forever.”
Since Apple is the only source for iPhones, an iPhone sale may get deferred due to limited supply, but it is NOT lost. And scarcity is likely to INCREASE overall demand for that iPhone model (over its product lifetime), not decrease it.
These analysts and “investors” keep trying to put a gun to Apple’s head to deliver a certain amount by a certain time. They’ve never heard of production constraints. How many companies sell high-end products in the 50 million range for a whole year? Apple as a company should be seen as a year-to-year company and not a quarter-to-quarter company. As far as I’m concerned no company should be measured quarter-to-quarter. That’s just insane. Taxes are reported for the entire year and consumers earn money over the entire year. Wall Street is simply stupid in their way of measuring a company’s performance.
If a company’s best sales were in the wintertime and a couple of major blizzards took place, it could certainly disrupt sales for a few weeks and that would affect sales quite a bit for a quarter. So, the analysts are going to say sales are poor and downgrade the company. They’re crazy. Quarters are only good for some day traders. I don’t think any company should think in terms of individual quarters because that’s too short-sighted.
Was at Apple Store Saddle Creek last night and was told by a store staffer that they had daily lines forming for iPhone 6 Plus models until last week. Apparently there were enough people who were willing to wait for an iPhone 6 Plus at retail from launch until almost now.
That is some kind of demand.
This current “feast” of iPhone demand and sales will ultimately taper, as it does in all of Apple’s product cycles. The analysts are probably cheerleading so they can load their portfolios for the, most likely, very profitable end of the quarter. At which point these same analysts will proclaim Apple can’t sustain the sales and will feel compelled to reduce their target price, reduce their holdings to take profits and thus causing the typical chain-reaction AAPL selloff. Wash, rinse, repeat 🙂
Someone should get a class together to sue Apple for making all of the profit in the smartphone business by locking their customers (victims) into a superior OS. Every day I am being hurt by the envy of those around me when I pull out my iPhone 6 plus. I’m thinking of putting it in a vice and bending it to deflect some of the fawning attention I keep getting.
They can add another 6+ sale as I bought one today.