Booming Apple sales strain supply, will beat estimates - report

[AppleInsider]

A combination of Mac OS X Leopard, refreshed Macs, and iPods have formed a perfect storm that hint Apple will exceed its already optimistic targets, according to investment bank Bear Stearns.

Checks with retail channels as well as the Asian manufacturing base indicate that Apple's product inventory is running unusually low in the holiday quarter, with only three weeks of stock on hand versus the four to five expected for the period, analyst Andrew Neff informed clients in a research note Thursday.

But unlike some past holiday quarters, the supply crunch is the result of a "confluence" of elements rather than any one clear motivating factor, Neff explains. The new iMac design, the release of Mac OS X Leopard, and Apple's stronger presence in Best Buy stores are all contributing to a large upswing in sales.

Buyers are also taking well to the new iPod line, particularly the iPod nano, the researcher notes. Bear Stearns has raised its estimated shipments of the media players from 24.3 to an even 25 million.

Some of the most surprising expansion may come from Mac sales. The financial group claims that its Asian investigations point to an increase in shipments versus earlier predictions of flat shipment numbers. Apple should produce about 2.2 million Macs, or roughly one percent more than the 2.16 million sold last quarter.

Neff maintained estimates that the iPhone will be an important component of Apple's financial outlook. About 2.13 million iPhones should ship given the combination of seasonal spikes and the introduction of the handset in Europe.

The only cautionary message for investors in the note warns that Apple will have to release one or more products at the start of calendar 2008 to avoid the sales slump that often occurs in the wake of the holidays. These are likely, Neff says: an ultraportable, an iPhone with 3G or 16GB of storage, and completely unexpected products should help soften or eliminate the sales drop between the fall and winter quarters.

Accordingly, Bear Stearns is raising its share price estimate for Apple from $243 to $249 -- the price of an 80GB iPod classic, Neff points out.

[ View this article at AppleInsider.com ]

[iCarbon]

I wonder whether its a good or bad sign that predicted stock prices are starting to look like long-term goals rather than old news. Considering their growth in previous years, you'd think they'd be moving up faster with all the market share they've gained in mac sales, plus the iphone.

Another year or two of 2-3 fold increases and I could have bloody well retired on aapl alone (I am still holding on to my stake, I'm not a dummy)!

[eAi]

Surprised at the only 1% increase in Mac sales from last quarter...

[Royboy]

Originally Posted by AppleInsider

A combination of Mac OS X Leopard, refreshed Macs, and iPods have formed a perfect storm that hint Apple will exceed its already optimistic targets, according to investment bank Bear Stearns.

------------------

But unlike some past holiday quarters, the supply crunch is the result of a "confluence" of elements rather than any one clear motivating factor, Neff explains. The new iMac design, the release of Mac OS X Leopard, and Apple's stronger presence in Best Buy stores are all contributing to a large upswing in sales.

-----------

Some of the most surprising expansion may come from Mac sales. The financial group claims that its Asian investigations point to an increase in shipments versus earlier predictions of flat shipment numbers. Apple should produce about 2.2 million Macs, or roughly one percent more than the 2.16 million sold last quarter.

-----

Do any of these sources, who guess on how many Macs Apple sells, every give a breakdown on the difference models of Macs Apples sell? I know Apple doesn't publish the numbers, but so many of these "sources" publish numbers of their guesses how many Macs are sold, but I never see any breakdown guesses on the number of Mac minis, iMacs, Mac Pros, Macbooks, or Macbook Pros. Has anyone seen any breakdown numbers (estimates or guesses by "authentic guessers"?

[solipsism]

I love reports like this.

Am I correct in thinking that Apple isn't releasing a 3G iPhone at MacWorld because we'd know about it due to the FCC filing. At the most--and I on't think this will happen either--we'd get an announcement then for an iPhone release several months later.

[anantksundaram]

Originally Posted by eAi

Surprised at the only 1% increase in Mac sales from last quarter...

I think the article was a bit ambiguously worded on that one: It says "Apple should produce about 2.2 million Macs, or roughly one percent more than the 2.16 million sold last quarter......"

I suppose actual sales could increase more than 1% if inventory left over from the previous quarter is also sold off, in addition to the Macs produced in this quarter.

[backtomac]

Originally Posted by solipsism

At the most--and I on't think this will happen either--we'd get an announcement then for an iPhone release several months later.

I think we'll get an announcement with the actual product to closely follow. I don't think they can announce a 3g iPhone and wait 6 months to actually sell it as sales of the existing iPhone would tank. It'll have to follow the announcement by 4 -6 weeks, IMO.

[beakernx01]

Originally Posted by eAi

Surprised at the only 1% increase in Mac sales from last quarter...

The key metric is when they compare sales to the same quarter a year ago. While sales have increased every quarter for something like 8 quarters, I think the same quarter from the previous year is showing double-digit growth.

[mark2005]

Neff is really straining to find a negative. Investors compare year-over-year, not qtr-over-qtr, so Apple doesn't really have to introduce anything dramatic in Jan-Mar to beat last year's winter quarter, as Apple didn't start selling anything dramatic following last year's MacWorld (remember they announced the iPhone for sale in June!). By the way, Mac sales haven't usually increased qoq in the winter quarter (Macs not a Christmas gift, people waiting for MWSF, high back-to-school sales in fall qtr, Intel transition), so any increase is a positive. I think Neff is still a bit low on Mac sales, since laptops are a bigger Christmas item this year than in years past.

Going forward, I think the ultraportable Mac, speed/processor bumps for every Mac except MacBook, and updated AppleTV are coming over the Jan-Mar quarter; with updated MacBook in April and new 3G iPhone at end of June; and refreshed iPods in Sept. I wonder what will happen to the Mac mini.

My guess is the more expensive 3G iPhone will be announced in early June along with immediate availability of a 16GB version of the current model to avoid freezing sales.

[Sedicivalvole]

Originally Posted by mark2005

I wonder what will happen to the Mac mini.

My guess is the more expensive 3G iPhone will be announced in early June along with immediate availability of a 16GB version of the current model to avoid freezing sales.

Good idea that.

Please for the love of god do not kill the mini and just give it some luurvvve

[g3pro]

Originally Posted by solipsism

I love reports like this.

Am I correct in thinking that Apple isn't releasing a 3G iPhone at MacWorld because we'd know about it due to the FCC filing. At the most--and I on't think this will happen either--we'd get an announcement then for an iPhone release several months later.

It should be stated that Apple claiming FCC verification takes 6 months was a lie. The real reason they talked about it was to prevent people from renewing their contracts with other providers so that they can buy the iPhone at Day 1. RDF at its best.

[solipsism]

Originally Posted by g3pro

It should be stated that Apple claiming FCC verification takes 6 months was a lie. The real reason they talked about it was to prevent people from renewing their contracts with other providers so that they can buy the iPhone at Day 1. RDF at its best.

Did Jobs say it would take 6 months? I only recall him stating that he wanted to make the announcement before the FCC filing outed the iPhone and then went on to announce a release date 6 months later. I am under the impression that an FCC filing takes between 4-8 weeks depending on how busy they are, the complexity of the filling and the submission's completeness.

edit: I just watched the 2007 MacWorld iPhone keynote. Jobs said "takes a few months" which is truthful as "a few" can be as few as one. It is not limited to a minimum of three as some people tend to think.

[Rolo]

My guesses for Q1:

3m Macs
30m iPods
~2+m iPhones

Revenue: $12.202b
Profit: $1.77b
EPS: $1.98

[jsavage]

Originally Posted by AppleInsider

Accordingly, Bear Stearns is raising its share price estimate for Apple from $243 to $249 -- the price of an 80GB iPod classic, Neff points out.

[ View this article at AppleInsider.com ]

I think the stock would be a better investment !

Of course I bought it at the price of an iPod Power Adapter!

*feels good*

*Go AAPL, Lets kill 'em*

[PBG4 Dude]

Originally Posted by iCarbon

I wonder whether its a good or bad sign that predicted stock prices are starting to look like long-term goals rather than old news. Considering their growth in previous years, you'd think they'd be moving up faster with all the market share they've gained in mac sales, plus the iphone.

Another year or two of 2-3 fold increases and I could have bloody well retired on aapl alone (I am still holding on to my stake, I'm not a dummy)!

Moving faster? I bought in March @ 95.95/share. Current (20 minute delayed) quote is 191.64/share, almost double the price in 9 short months. I'm not sure how much faster AAPL can move. Last year's 12/7/2006 closing price was 87.04, so the stock has more than doubled in the last 12 months.

[rtdunham]

the article needs more clarity:

QUOTE: Apple should produce about 2.2 million Macs, or roughly one percent more than the 2.16 million sold last quarter.

Can that be correct? The company expects to sell (produce?) only 1 percent more in the holiday season (quarter?) than in the prior quarter? That sounds disastrous.

QUOTE: Neff maintained estimates that the iPhone will be an important component of Apple's financial outlook. About 2.13 million iPhones should ship given the combination of seasonal spikes and the introduction of the handset in Europe.

"should ship" should mean would ship this quarter, in the context of this article. is that what the author meant to say? Or will sales reach a total of 2.13 million by the end of the quarter, since the introduction of the product? There's a huge difference in the two interpretations. If apple sells 2.13 million in THIS quarter, i'd think that'd bode very well for its hitting or exceeding its 10M target.

could the writer clarify please? thanks.

PS: Sounds like there are some market-savvy readers onboard: Can any of you provide a link to quarter-by-quarter sales figures? A graph like the commonly available stock price charts would be real handy! Must exist out there somehwere, and if it doesn't it would be a nice resource/asset for someone to prepare for the rest of us. Yeah, i'm begging...

[JeffDM]

Originally Posted by solipsism

Did Jobs say it would take 6 months? I only recall him stating that he wanted to make the announcement before the FCC filing outed the iPhone and then went on to announce a release date 6 months later. I am under the impression that an FCC filing takes between 4-8 weeks depending on how busy they are, the complexity of the filling and the submission's completeness.

edit: I just watched the 2007 MacWorld iPhone keynote. Jobs said "takes a few months" which is truthful as "a few" can be as few as one. It is not limited to a minimum of three as some people tend to think.

If the device was found to comply out the gate, then I think that would be a lot shorter than it would be if you had to rework the device and re-test.

I'd say that the timetable wasn't totally regulatory, although it's very likely part of the reason.

[SpamSandwich]

Only 2.13 million iPhones? Correct me if I'm wrong, but that does not sound like they'll hit their projections on iPhone sales for next year... wasn't it 10 million?

[JeffDM]

Originally Posted by Sedicivalvole

Good idea that.

Please for the love of god do not kill the mini and just give it some luurvvve

I can't help but wonder if the occasional the-mini-is-dying rumor is just a ruse to get a quick boost in sales.

[JeffDM]

Originally Posted by SpamSandwich

Only 2.13 million iPhones? Correct me if I'm wrong, but that does not sound like they'll hit their projections on iPhone sales for next year... wasn't it 10 million?

Per quarter? If you average 1.67 million per full quarter from introduction til the end of 2008, that would make 10M.

[solipsism]

Originally Posted by SpamSandwich

Only 2.13 million iPhones? Correct me if I'm wrong, but that does not sound like they'll hit their projections on iPhone sales for next year... wasn't it 10 million?

If we get a 3G on the market around the middle of 2008 then we get the early adopters again buying another new iPhone (me included), the masses who are waiting for a 3G iPhone, the people who are waiting for their contracts to be up, and the 2008 seasonal buyers. If Apple can sell about 4M EDGE iPhones in only 6 months in 2007 then selling 10M in or through--I forget what Jobs actually said--the 2008 calendar year doesn't seem like a an unobtainable goal.

[jwdawso]

Originally Posted by rtdunham

the article needs more clarity:

QUOTE: Apple should produce about 2.2 million Macs, or roughly one percent more than the 2.16 million sold last quarter.

Can that be correct? The company expects to sell (produce?) only 1 percent more in the holiday season (quarter?) than in the prior quarter? That sounds disastrous.

See Mark2005's post above - Apple's big Macintosh quarter is the back-to-school quarter, not Christmas. The big iPod quarter is Christmas.

[samurai1999]

Originally Posted by rtdunham

the article needs more clarity:

QUOTE: Apple should produce about 2.2 million Macs, or roughly one percent more than the 2.16 million sold last quarter.

Can that be correct? The company expects to sell (produce?) only 1 percent more in the holiday season (quarter?) than in the prior quarter? That sounds disastrous.

Apple's Q1 quarter is usually fairly flat WRT the previous quarter - because the Q4 includes the 'back-to-school' season which is always really good for Apple.

If you compare this Q1 with the previous Q1
- you get 2.2m vs 1.6m
- i.e. 37.5% year-on-year growth
- which is pretty consistent with the growth they've been achieving over the last several quarters...
- (actually it's a little higher - the previous year was 30%)

[Constable Odo]

I'm wondering if the new MacPros which could be introduced around the time of MacWorld will have a new case to go along with the Penryn processors. I wouldn't mind seeing a slightly smaller and lighter case. That would also surely give Apple continued momentum during the slack season. Those 3.2 GHz Penryn MacPros will be awesome desktop replacements. I'm still hoping to acquire an 8-core (dual 4-cores) model a short while after it comes available.

[Rot'nApple]

Originally Posted by PBG4 Dude

Moving faster? I bought in March @ 95.95/share. Current (20 minute delayed) quote is 191.64/share, almost double the price in 9 short months. I'm not sure how much faster AAPL can move. Last year's 12/7/2006 closing price was 87.04, so the stock has more than doubled in the last 12 months.

AMEN!

I'm looking at the post-it notes on my iMac where on 11/7/07 AAPL was 192.68. Then the market had a correction and Apple's stock dipped to 153.76 on 11/12/07. Not even one month later, the stock has rebounded, currently 194.30 on 12/7/07 (market not closed for the day yet). I wish my other E-Trade stock purchases can regain their lost ground as quickly as Apple's had!

[kenaustus]

I have no doubts that Apple will have a blow out quarter and break a lot of records at the consumer level. On the pro level I think the customers will wait until they see what is released in January - unless they want to buy in 2007 for tax reasons.

I'm also looking for the Jan-Mar quarter to be significant. The MacBook Pro Ultra will fly off the shelves and I expect Steve J to add more juice in the iPhone area - especially in the area of memory. With the SDK due in Feb for the iPhone and touch I can see a lot of people reaching for the credit card as soon as the app they need is available. (I'm in the need-the-app and want-more-memory groups.)]

I can see other boosts as well, based on what Intel delivers. Both the consumer and pro areas can benefit here. A nice surprise would be a strong update for the Mac mini and a mid range headless Mac for current mini users to upgrade to.

Considering that iLife & iWork have already hit the 08 level I don't see anything here, except for maybe a push on Bento, which is very interesting for me. (It's clearly worth looking at if you haven't already.)

[MacTel]

I'm hopeful that a Apple TV 2.0 will be intro'd at Macword.

A Macbook Lite would be good too and from the rumor mill has a good chance of showing up.

A dark horse might just be the Apple branded navigation system. Microsoft has their Sync system in the Ford brands, so naturally Apple might follow.

[anantksundaram]

Originally Posted by MacTel

I'm hopeful that a Apple TV 2.0 will be intro'd at Macword.

A Macbook Lite would be good too and from the rumor mill has a good chance of showing up.

A dark horse might just be the Apple branded navigation system. Microsoft has their Sync system in the Ford brands, so naturally Apple might follow.

Interesting predictions! @TV 2.0 is overdue. V1 was lame.

[solipsism]

Originally Posted by anantksundaram

Interesting predictions! @TV 2.0 is overdue. V1 was lame.

I already have a v2 AppleTV. It's a MacMini I turned into an AppleTV. I now have DVD and CD playback right from the device an easy way to remote into it to add files (sense I built for my parents) and it has the exact startup and intro as the AppleTV. Surprisingly it boots faster than than my AppleTV and has a zippier interface.

[anantksundaram]

Originally Posted by solipsism

I already have a v2 AppleTV. It's a MacMini I turned into an AppleTV. I now have DVD and CD playback right from the device an easy way to remote into it to add files (sense I built for my parents) and it has the exact startup and intro as the AppleTV. Surprisingly it boots faster than than my AppleTV and has a zippier interface.

Very nice! (What a lovely kid too!)