"The sum of a week’s worth of Asian data points suggests little potential for upside to consensus revenue estimates for either the September or December quarters," analyst Richard Gardner told clients in a research note on Monday."While we are modestly raising our September and December quarter revenue estimates, our new estimates are not meaningfully above current consensus."
For the third calendar quarter ending September, the analyst increased his revenue estimate from $4.63B to $4.68B to reflects stronger-than-expected MacBook sales. He said MacBook sales for the quarter are now tracking close to 575,000 units compared to his previous estimate of 540,000 units. He is also modeling for sales of 9 million iPods during the quarter, including 5 million iPod nanos and 1 million iPod shuffles.
18.8M iPods and 1M notebooks in Dec. quarter
Similarly, the analyst upped his fourth calendar quarter (ending December) revenue estimate from $6.31B to $6.47B on expectations that both MacBook and iPods sales will track significantly higher. "We have raised our MacBook shipment estimate from 600K to 675K and our overall laptop shipment estimate from 925K to 1.0M, " he wrote. "We have raised our iPod shipment estimate from 16.0M to 18.8M to reflect an increase in “nano” shipments from 8.5M to 10.0M and an increase in “shuffle” shipments from 2.5M to 4.0M."
No "real" video iPod this year
Meanwhile, Gardner said his checks now indicate that a video iPod with larger screen and virtual Click-Wheel is unlikely to make an appearance before the peak holiday season. "The iPod line announced on September 12 appears to be the line that will have to carry Apple until MacWorld San Francisco in January," he wrote. "This is likely to disappoint some investors who are still expecting at least one more new product before the peak holiday selling season."
No iPhone at Macworld, 25M sales estimates too bullish
Gardner also said checks suggest volume availability of an Apple-branded mobile phone is unlikely until later in the first calendar quarter of 2007 or early in the second quarter. "Given that Apple’s phone will almost surely cannibalize a portion of iPod nano sales, we doubt management will introduce the product at Macworld San Francisco in January, a full quarter ahead of availability, for fear of negatively impacting nano sales," he explained. "We also believe Apple’s phone sales will be limited to the U.S. market during the initial 6-12 months and that the product be relatively expensive -- in the top 25th percentile of the current phone industry range --suggesting that recent press reports of up to 25M units during the first year are significantly too bullish."
"We might reconsider our Hold rating and potentially become more interested again for fresh money, all things being equal, on a pullback below $71, at which point the shares would offer 20 percent upside to our 12-month target," Gardner continued. "We believe the lack of additional new products through year-end and the lack of a phone announcement in January could provide such an opportunity."
Despite cutting his rating on Apple, Gardner increased his price target on shares of the company from $80 to $85.