Apple may have shipped record 2.54 million Macs in third quarter

[AppleInsider]

Based on an analysis of Gartner Group's recently published estimates on domestic Macintosh sales, AppleInsider contributing analyst Andy Zaky estimates Apple to have shipped 2.54 million Macs during its third fiscal quarter ended June.

Extrapolating Gartner's Data

According to Gartner, Apple shipped about 1,397,000 Macs in the United States during the three-month period that ended on June 30, 2008 (fiscal Q3).* In fiscal Q3 2007, domestic sales made up 57.31% of total Mac sales.* Based both on the recent trend of U.S. shipments making up a smaller portion of total Mac sales, and on the anticipated slowdown in consumer spending (due to the rising price of oil and other inflationary pressures), domestic sales could reasonably fall to about 55% of total sales.
*
As the table below indicates, U.S. Mac sales as a percentage of total sales fell moderately in Q1 and Q2 from the same periods last year.* U.S. Mac sales made up a total of 44.63% and 44.12% in Q1 and Q2 of 2008, falling from 50.31% and 48.85% in Q1 and Q2 of 2007.* This could be explained in any number of plausible ways.



First, one could argue that worldwide Mac sales are growing at a much higher pace than in the U.S. and that one should expect U.S. sales to make up an increasingly smaller portion of total shipments. The historical chart (below) on Mac shipments lends some support to this theory. Sales in Europe were blistering hot in Q1 and Q2 when compared to other periods in Apple’s history and when compared to the U.S. in general. Mac sales in Europe were up 43.60% in Q1 and 44.80% in Q2; while in the United States, Mac sales were up only 28.1% and 36.3% during those same time periods, respectively.





Furthermore, European sales continue to have a prominent impact on overall Mac shipments.* For Q1 and Q2, European sales made up about a third of total Mac sales (30.5% in Q1 & 27.4% in Q2).* The U.S. by contrast, made up about 44.63% in Q1 and 44.12% in Q2.* Thus, European Mac sales are not only growing at a faster pace than in the U.S., but have a solid overall impact on total shipments.* This tends to suggest that the U.S. will make up a smaller total portion of Mac sales in Q3 as it did in Q2 and Q1 when compared to last year.** ***
*
Secondly, one could argue that the recent slowdown in consumer spending (a foregone conclusion on Wall Street that has yet to be proven) has had at least a marginal impact on domestic sales.* While it is yet to be seen whether a slowdown in U.S. consumer spending will ever actually occur, and if it does whether it will affect Apple, it’s nevertheless something that shouldn’t be easily dismissed.* If U.S. consumers have in fact recessed, then the Gartner estimate, as impressive as it is, is even more impressive when considering the state of the consumer.
*
It should be mentioned that the Gartner Group estimates cannot be tested for accuracy and that the arguments put forth in this article are based on Gartner’s findings.* Apple does not release data on U.S. Macintosh sales so there is no way to compare Gartner’s findings with Apple’s actual reports. Apple reports U.S. sales under the heading of two separate operating segments.

One operating segment, the “Americas,” presumably includes North and South America while the other operating segment, “Retail,” includes the U.S. and any other countries where Apple retail stores are located. Thus, it makes it nearly impossible to determine exactly the number of Macs Apple has shipped in the United States. Yet, the table below gives a rough approximation of U.S. shipments by combining both “retail” and the “Americas” since U.S. shipments probably make up the vast majority of each of these two segments:



Supporting Argument Based on Current Growth Rate

While the growth rate in Mac sales, taken alone, doesn’t present with particularly strong predictive evidence of where Mac sales will fall in Q3, it can be supportive of hard evidence such as that presented by the Gartner Group.** The current trend in Mac sales suggests that Apple will report between 2.547 million (based on the 44.39% growth seen in Q1) and 2.662 million Macs (based on the 50.89% growth rate seen in Q2).**
*
Alternatively, one could also compare the sequential growth rates between Q2 and Q3 of previous periods and apply the differences to this period.* For example, last year (2007) Apple reported a 16.28% sequential growth rate between Q2 and Q3.* In 2006, that sequential growth rate was 19.33%.* Based on the most recent sequential growth rate of 16.28%, Apple would report about 2.662 million Macs.* Yet, sequential growth rates and current year-over-year (YoY) growth rates have only modest predictive power due novel conditions and to the law of large numbers.* At some point, Mac sales are going to be so large that Apple will not be able to sustain its 50% growth rate that it enjoyed in Q2.*
*
Supporting Arguments Based on NPD Data

NPD data for the months of April and May indicate that Mac sales are up some 50% from the same months last year.* If NPD data for the month of June also suggests 50% growth, then it’s possible that Apple could record nearly 2.646 million Macs in Q3.* Yet, NPD data has tended to suggest conclusions that have been proven overly aggressive in the past when it comes to Mac sales.* Yet NPD data is supportive of a 2.54 million Mac estimate if viewed conservatively.* **
*
Apple will hold its fiscal year 2008 third quarter conference call on Monday, July 21, 2008, 2:00 p.m. PDT/5:00 p.m. EDT. Actual third quarter results will be released approximately 30 minutes prior to the call. AppleInsider will provide comprehensive coverage.

Andy Zaky is an AppleInsider contributor and the founder and author of Bullish Cross, an online publication that provides in-depth analysis of Apple's financial health.

Disclosure: Andy owns long term 2009 and 2010 call options in Apple. The information contained in this post is not to be taken as either an investment or trading recommendation, and serious traders or investors should consult with their own professional financial advisors before acting on any thoughts expressed in this publication.

[ View this article at AppleInsider.com ]

[anantksundaram]

I am sure that general fact that numbers are going to be at historic highs is in the ballpark. However, I would like to have seen how their prior forecasts using this methodology stacked up against subsequent actuals.

I see too much variation from quarter-to-quarter in a critical forecasting variable, "% Macs sold in the US."

[Walter Slocombe]

funny, my thoughts on reading the US figures in the earlier story were "Gee Apple must have sold around 2.5 world wide"

I wonder if I couched that in 10 or so paragraphs, could I charge for it while calling myself an analyst?

I reckon if we don't see an extra half million this time next year, something will be very VERY wrong!

[teckstud]

Does anybody know how many Apple TVs have shipped?

[Ireland]

Originally Posted by teckstud

does anybody know how many apple tvs have shipped?

12 I think. Not 12 million, but 12.

[jragosta]

I'm sorry, but this analysis must be mistaken. EVERYONE knows that Apple is doomed and that they're focusing on the iPhone because they can't sell computers. Just read any 'analyst' commentary.

Please retract the story.

[Johnny Mozzarella]

The growth of the "Retail" segment has had a more significant effect on the "Americas" since the vast majority of it's stores are in the U.S.


US aprox 210
Canada = 6

UK = 15
Italy = 1

Japan = 7
Austailia = 1
China = 1

[zinfella]

All this means is that the Mac platform will become more attractive to those who write malware.

[HFU]

Apple will beat the estimate for fiscal Q3 again. It'd be interesting to see the outlook of fiscal Q4 which Apple easily sold 1 million iPhone 3G in first opening weekend!

[Constable Odo]

OK, so the Mac shipment numbers look nice, but I'd like to know when Apple's stock is going to go back to $200 a share. Any numbers you can plug in to find this out. How about three months from now or six months from now or maybe two years from now. I guessing that the more numbers on Apple that you plug into a spreadsheet, will somehow make the stock price move upward. How about plugging in weekly iPhone 3G sales or daily revenue from the App Store. Think that will help?

I'm still unable to connect Apple fundamentals to a rational stock price. How is this done?

Oh I forgot to add that Gene Munster is calling Steve Jobs a liar. Apple didn't sell a million iPhones over the weekend, only half that amount. That should help move the stock price some. I won't say in which direction.

[solipsism]

Originally Posted by Johnny Mozzarella

The growth of the "Retail" segment has had a more significant effect on the "Americas" since the vast majority of it's stores are in the U.S.

US aprox 210
Canada = 6

UK = 15
Italy = 1

Japan = 7
Austailia = 1
China = 1

Looking at the EU growth and calculating my theory that the real 'halo effect" were the Apple Stores, not the iPods, the EU could trounce America in Mac sales if they would only build stores out there with the fervor that they build them here.

Originally Posted by zinfella

All this means is that the Mac platform will become more attractive to those who write malware.

I still don't buy it as the main reason why Macs don't have viruses. EVen if you are only selling one Million units per quarter that is 4M units per year, not ncnluding the installed base and that the fact that Mac users tend to be more financially sound than Windows users on average. If the "security through obscurity" epithet were true then OS X should have been plagued with viruses once the Mac sales increases a half a decade ago, should have a percentage of the viruses that is inline with their worldwide market-share and should have have had less viruses when Macs used System 7 as their market-share was much lower then.

[Chris_CA]

Originally Posted by jragosta

I'm sorry, but this analysis must be mistaken. EVERYONE knows that Apple is doomed

Didn't they go bankrupt and Microsoft bought them out a few years ago?

[anantksundaram]

Originally Posted by Constable Odo

Oh I forgot to add that Gene Munster is calling Steve Jobs a liar. Apple didn't sell a million iPhones over the weekend, only half that amount. That should help move the stock price some. I won't say in which direction.

Link, please?

[kresh]

Originally Posted by teckstud

Does anybody know how many Apple TVs have shipped?

Originally Posted by Ireland

12 I think. Not 12 million, but 12.

Wow. My friends and family have purchased twice the amount you have estimated. You have passed your Analyst Bar exam and are hereby certified to work for Gartner, NPD, or any guessing firm of your choice

[teckstud]

Originally Posted by kresh

Wow. My friends and family have purchased twice the amount you have estimated. You have passed your Analyst Bar exam and are hereby certified to work for Gartner, NPD, or any guessing firm of your choice

And what are you- a certified lemon farmer?

[melgross]

Originally Posted by Ireland

12 I think. Not 12 million, but 12.

Actually, the estimate was that Apple had likely sold a million by several months ago. We discussed that here a while ago.

[anantksundaram]

Originally Posted by teckstud

And what are you- a certified lemon farmer?

I guess there must be millions of lemon farmers then..... (including me, living up in the far North!).

[melgross]

Originally Posted by Constable Odo

OK, so the Mac shipment numbers look nice, but I'd like to know when Apple's stock is going to go back to $200 a share. Any numbers you can plug in to find this out. How about three months from now or six months from now or maybe two years from now. I guessing that the more numbers on Apple that you plug into a spreadsheet, will somehow make the stock price move upward. How about plugging in weekly iPhone 3G sales or daily revenue from the App Store. Think that will help?

I'm still unable to connect Apple fundamentals to a rational stock price. How is this done?

Oh I forgot to add that Gene Munster is calling Steve Jobs a liar. Apple didn't sell a million iPhones over the weekend, only half that amount. That should help move the stock price some. I won't say in which direction.

When the market moves up from its severe downturn, then Apple's stock will also move up that much higher. Apple is being pulled down by high oil prices, the low dollar, and recessional tendencies of investors overall.

[melgross]

Originally Posted by anantksundaram

I guess there must be millions of lemon farmers then..... (including me, living up in the far North!).

I have a lemon tree as well.

[kresh]

Originally Posted by teckstud

And what are you- a certified lemon farmer?

hehe Could be. But the funny thing is that the only people I ever hear complaining about it are on-line spec queens that don't own the AppleTV, or those who bought the AppleTV and fume because it does not have their pet features, which they knew upfront.

[David Stevenson]

Originally Posted by melgross

I have a lemon tree as well.

There is one in my back yard: the fruit is as hard as a bricked iPhone.

[melgross]

Originally Posted by David Stevenson

There is one in my back yard: the fruit is as hard as a bricked iPhone.

I don't know about that, but I get juice from my lemon.

[lkrupp]

I think there's a bill floating around congress to put analysts who manipulate stock prices with their "analysis" in jail. I hope it gets passed soon.

[melgross]

Originally Posted by lkrupp

I think there's a bill floating around congress to put analysts who manipulate stock prices with their "analysis" in jail. I hope it gets passed soon.

No. Not exactly. There's a "rule" coming out about knowingly passing false rumors about a company, specifically related to a number of financial firms, whose stock has been beaten down lately, and whose stability is importand for the market, and the economy as a whole.

Congess is looking into short selling as well (as this is also related to rules about that for these institutions).

They MAY expand this to a broader interpretation later on.

[jragosta]

Originally Posted by lkrupp

I think there's a bill floating around congress to put analysts who manipulate stock prices with their "analysis" in jail. I hope it gets passed soon.

It's already illegal to financially benefit from intentionally posting inaccurate information.

Of course, proving it is a different matter.