Apple’s fiscal Q2: The iPhone channel tailwind

“Apple reported earnings last week and brought back the ‘wow factor,'” Matt Lew writes for Seeking Alpha. “Since AAPL revised its guidance methodology in January 2013, when it reported its fiscal Q1 2013 earnings, it has failed to deliver the blowout results investors had come to expect for so many years. That all changed on Tuesday. In particular, from a forward-looking perspective, I believe it is always important to look at the channel inventory numbers and well as commentary provided by management.”

“AAPL actually drew down its channel inventory during the quarter by 200,000 units. It is not a significant number, but it confirms that AAPL exited the quarter with a backlog of demand,” Lew writes. “That demand, as indicated in commentary, was subsequently met and in-balance during January. The 200,000 drawdown is in contrast to the last holiday period where AAPL actually increased its channel inventory (build) by one million units.”

“The changes in these channel inventory amounts actually mask a larger growth in year-over-year unit shipments than reported,” Lew writes. “The underlying sell-through growth, after accounting for channel inventory changes, was actually 49.3%, compared to the reported 45.9%.”

Read more in the full article here.

6 Comments

  1. Last week, when Samsung managed to persuade analysts that they had sold exactly the same number of smartphones as Apple, I pointed out that apart from Samsung’s usual ploy of trying to equate their ‘shipped’ numbers with Apple’s sales figures, Apple had also announced that their inventory was lower than optimum ( i.e. the opposite of channel stuffing ).

    When you take into account the amount of channel stuffing that Samsung would have done with their unloved smartphones, their ‘shipped’ figures will have been substantially inflated over their sales figures, while Apple always provides sales figures and is unable to properly fill up it’s distribution channel because demand is so strong. It’s quite obvious that in reality Apple comfortably overtook Samsung when it came to total smartphone sales, but Samsung are relying on smoke and mirrors to conceal the truth.

  2. In apple’s Q2 and Q3, 2013, Samsung did BOGO sales on just released Galaxy flagship models, locking people in on 2 year contracts. Apple is going to pick off a lot of those Samsung customers, in addition to the tailwind.

  3. “Since AAPL revised its guidance methodology in January 2013, when it reported its fiscal Q1 2013 earnings, it has failed to deliver the blowout results investors had come to expect for so many years.”

    Really? That’s not how I remember last Spring at all.

  4. A lot of talk about how well Apple have done and then zero response in the market.
    No surprise there but I would like the stock to hit $130 soon. Not sure what Apple can do except may invent a matter transporter.

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