Apple on track to sell 25 million iPods this quarter
After analyzing October sales data from market research firm NPD, investment bank Piper Jaffray said Wednesday it expects Apple will sell a record 25 million iPods during the three-month period ending December.
"While it is way too early to make a definitive call on December quarter iPod results, we have analyzed the first month of NPD data for the quarter and found that it suggests iPod units of 24 million to 25 million," analyst Gene Munster wrote in a brief research note.
"The 24 million to 25 million unit approximation is based on various assumptions and is an extrapolation of one month of data," he added, "when the second month of data is released, our analysis will likely lead to a slightly different iPod unit figure than what our analysis suggests based on the first month of data, so we believe investors should supplement this data point with other information."
Prior to Wednesday's NPD results, the analyst had been modeling the Cupertino-based company to sell approximately 23.5 million of the digital media players during the December quarter, slightly above Wall Street consensus estimates of 23 million. Therefore, he said, the October data is promising.
Munster's analysis of NPD iPod unit data starts by looking at the percentage contribution in NPD data from each month of the quarter in past December quarters. He noted that over the past three December quarters, iPod unit shipments were broken down monthly, on average, as follows: 12 percent (October), 24 percent (November) and 64 percent (December).
However, in quantifying this years percentage breakdown, the analyst conservatively factored in a larger-than-average October monthly contribution of 15 percent given the fact that the new iPods announced in September are radically different from the previous models.
"Apple has announced new iPods in September for the last 3 years, but this year's models are significantly more innovative than the past upgrades," he explained. "As such, we believe the new iPods are driving sales in Oct. to a greater degree than they have in the past."
In using the first month of NPD data and the typical percentage of iPods shipped in the first month, Munster then extrapolates those figures to reach his estimate for what NPD data will look like for the full December quarter.
Apple's current single quarter iPod sales record was achieved last year, when it sold just over 21 million iPods during the three-month period ending December, 2006.
"While it is way too early to make a definitive call on December quarter iPod results, we have analyzed the first month of NPD data for the quarter and found that it suggests iPod units of 24 million to 25 million," analyst Gene Munster wrote in a brief research note.
"The 24 million to 25 million unit approximation is based on various assumptions and is an extrapolation of one month of data," he added, "when the second month of data is released, our analysis will likely lead to a slightly different iPod unit figure than what our analysis suggests based on the first month of data, so we believe investors should supplement this data point with other information."
Prior to Wednesday's NPD results, the analyst had been modeling the Cupertino-based company to sell approximately 23.5 million of the digital media players during the December quarter, slightly above Wall Street consensus estimates of 23 million. Therefore, he said, the October data is promising.
Munster's analysis of NPD iPod unit data starts by looking at the percentage contribution in NPD data from each month of the quarter in past December quarters. He noted that over the past three December quarters, iPod unit shipments were broken down monthly, on average, as follows: 12 percent (October), 24 percent (November) and 64 percent (December).
However, in quantifying this years percentage breakdown, the analyst conservatively factored in a larger-than-average October monthly contribution of 15 percent given the fact that the new iPods announced in September are radically different from the previous models.
"Apple has announced new iPods in September for the last 3 years, but this year's models are significantly more innovative than the past upgrades," he explained. "As such, we believe the new iPods are driving sales in Oct. to a greater degree than they have in the past."
In using the first month of NPD data and the typical percentage of iPods shipped in the first month, Munster then extrapolates those figures to reach his estimate for what NPD data will look like for the full December quarter.
Apple's current single quarter iPod sales record was achieved last year, when it sold just over 21 million iPods during the three-month period ending December, 2006.
Comments
After analyzing October sales data from market research firm NPD, investment bank Piper Jaffray said Wednesday it expects Apple will sell a record 25 million iPods during the three-month period ending December.
I think 25 million is too low. December 2006 there was only a single (silver) shuffle and no touch. The iPod line is much broader this year, and while there is no doubt self-canibalization going on, remember that Apple has only a seventy percent market share in only the USofA. Plenty of room for growth. Also, note that there is only one iPod model that is an MP3 player (the shuffle). All the others are media (video) players that also play MP3s for historical reasons.
If this turns out to be true, I may have to begin slapping these whiners the moment I hear them begin.
"What sucks about Apple is---"
>>SMACK<<
Up the fuck Shut you must, young skyhumper.
LOL.
On the other hand, Piper Jaffray was pretty accurate so far.
The problem is, Apple can not sustain their iPod sales growth rate forever. So far, Apple was able to sell during December quarter about the same number of iPods as in the previous 3 calendar quarters combined. Now the sales during the firs quarters is so high It will be hard to beat them. 25 million is a huge number. It will be a remarkable success if Apple makes that much. There is a danger of building over-expectations and if Apple makes 19 million will look like a failure.
On the other hand, Piper Jaffray was pretty accurate so far.
As long as the population grows, there will continue to be an expansion of the marketplace for iPod buyers.
As long as the population grows, there will continue to be an expansion of the marketplace for iPod buyers.
That's not much of a growth rate.
That's not much of a growth rate.
Well, sperm boy, get cracking.
As long as the population grows, there will continue to be an expansion of the marketplace for iPod buyers.
1 year old iPodders?
On a completely unrelated note, I should have my iPhone by the first week in December!
This new line is awesome.. so much more offered this year as a competition killer and a must have replacement for previous generation product.. This is a new generation of product.
Saturation is close to 1 billion players as compared to historic product cycle saturation for cassette and cd players in the 500 million range.. The reason for increase is that these players are for archiving customer music library too... video.. podcasts.. books.. etc etc. make the market for these players much much larger than CD players ever were. Automotive life cycle is hardly started and still burdened with CD as the primary format. 60 million kids in 1st world come of age for their first ipod each year.. Apple and competitors are getting a small piece of this market with lots of room for growth.
The product cycle has yet to suffer price erosion as more features for the same price is proof of early stage of life cycle of product format (see 9.95 CD player at Walgreens). Besides.. format is changing with upgrades in software that expand features .. so the ipod is re-inventing itself and life cycles and saturation are hard to even guess at..
Apple is developing a consumer franchise that takes time to penetrate other countries.. count the number of itunes stores in the world today versus just 3 years ago (extrapolate percentage to future). Take consumer electronics retail with Best Buy as an example.. It took them 20 years to get to where they are. Now, look at the square footage model for those stores.. around 1000 of them i think.. then compare the next generation of retail coming from Apple's business model.. and then look at the $ return for each square foot in the two companies. The future is not at Best Buy. They will be around for a long time but they can't grow their business model even at a 25% rate of Apples growth. So, Best buy is a mature business model (see stock buy backs to hold up stock price with a slower growth rate)
I could believe 30 million this quarter .. but not less than that number even if the economy is slowing down. CE does well during a slow down as the consumer may be spending less outside of the home - but inside for personal use is not hurt by the kind of economic slow down presently being predicted.
This is a 30 million unit quarter.. a 42% increase in unit volume.. It is going to happen because apple has an established consumer electronics franchise that can't be stopped in a product format this early in a product life cycle. it is just the way it works! The recent YOY slowdown in revenues was the result of a long product format cycle that has been completely replaced! it is almost like we are starting all over again with the addition of video and internet capability of the nano and touch..
Next year, YOY growth will be more like what is predicted for this year.. But then, these same analysts can't add up that Apple will make in excess of $6 this year either.. They run an entire year behind in their projections because they don't get it. just like a year ago when they projected 2008 fiscal to be around $4.00.. that is what they earned in 2007 fiscal.. a fast growing company like apple with a strong consumer electronics franchise is difficult for analysts to forecast. they don't understand product format and life cycles of those formats in Consumer electronics. They don't understand market share and they sure don't get consume electronics. I was in this business when Best Buy was 12 stores called Sound of Music in the 80's.. I have seen the life cycle of the cassette player and CD player first hand. This is an exciting time for CE as Apple is doing very very well. I have never seen a better marketing mix for Consumer electronics than Apple is presenting today. It is just awesome..
1 year old iPodders?
Yes, they call them "Poddy Pants".
The problem is, Apple can not sustain their iPod sales growth rate forever.
That, in part, is what iPhones are about
Getting them before they're poddy trained?
21 million to 25 million YOY is very low considering what is different this year. That would be a good forecast for YOY sales a year from now as a percentage of growth.
I could believe 30 million this quarter .. but not less than that number even if the economy is slowing down. CE does well during a slow down as the consumer may be spending less outside of the home - but inside for personal use is not hurt by the kind of economic slow down presently being predicted.
This is a 30 million unit quarter.. a 42% increase in unit volume.
I'll see your 30 million and raise another 2 (or 3). Good analysis, by the way. The only cloud on the horizon (this quarter) is the supply of touch screens. The Touch is a completely new category of product. That's what's going to drive "ipod" growth next year, with a "nano" touch (and "nano" iPhone).