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UBS says iPhone sales ahead of estimates, new iPods on the way

post #1 of 52
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Shares of Apple Inc. rose nearly 5 percent on Tuesday after an analyst for UBS Investment Research said checks indicate that the company will likely beat its stated sales goal of 730,000 iPhone units for the current quarter.

"Our checks and discussions with Apple and AT&T store representatives continue to indicate relatively solid demand for the iPhone despite a significant moderation in excitement and hype from the June 29th launch," analyst Ben Reitzes told clients in a research note Tuesday.

In addition to visiting and calling several Apple retail stores as part of his latest study, the analyst also surveyed 70 AT&T stores across the country to get a feel for iPhone demand, availability and problems customers may be having. He explained that polling AT&T stores is an essential measure in gauging the iPhone story since Apple stores could conceivably have more motivation to promote a pro-Apple bias.

"AT&T stores we spoke with indicated that sales of the iPhone remain relatively solid through mid-August," he wrote. "While demand has slowed from the initial launch as expected, the weighted average of iPhones sold per store per day in our survey was about 5."

Based on his findings, Reitzes said it's appropriate to assume that each of AT&T's 1800 nationwide retail stores are selling at least 3 iPhone handsets per day, which alone would equate to approximately 500,000 units over the course of the quarter or about 60 percent of his fiscal fourth quarter estimate of 800,000 units.

"Factoring in hundreds of thousands of iPhones sold through Apple stores and online via Apple.com, we still believe that our unit estimate is conservative," he told clients. "While Apple has not provided any information into expanded distribution of the iPhone beyond Apple and AT&T stores, we continue to believe Apple may expand distribution to include other retailers over time (Best Buy would make sense)."

In the coming weeks, the analyst also expects Apple to announce its European iPhone strategy, which will initially include just three European countries -- the UK, France and Germany. iPhone shipments for those countries should begin in the December quarter, he said, and expanded to other nations and parts of Asia in 2008.

"We believe that there is no technical barrier that prohibits Apple to sell the iPhone in China despite there being no iTunes store in the region (a user can use iTunes and activate the phone with an internet connection)," he wrote. "We believe new models for the iPhone will emerge next year, which could help sales incorporating a sleeker design at more attractive price points."

In his note to clients, the UBS analyst also said he expects Apple to refresh its iPod video and iPod nano lines sometime next month. Among the expected introductions are higher capacity iPod nanos at aggressive price points, as well as a flash based widescreen video iPod likely using multi-touch technology for less than $300.

"We believe this is an important launch in that it should re-stimulate iPod sales into the holiday season," he wrote. "In addition, we believe many consumers have been waiting for this upgrade to take place, especially in the video iPod products, as it has been about two years since that line has had a major upgrade."

Reitzes reiterated his Buy rating and $175 price target on shares of the Cupertino-based electronics maker but made no changes to his current estimates.

Apple investors reacted favorably to the comments, sending shares of the company up nearly 5 percent to $128.70 in early afternoon trading on the Nasdaq stock market.
post #2 of 52
Quote:
In the coming weeks, the analyst also expects Apple to announce its European iPhone strategy, which will initially include just three European countries -- the UK, France and Germany. iPhone shipments for those countries should begin in the December quarter, he said, and expanded to other nations and parts of Asia in 2008.

Canada?!

Is Rogers being daft?
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post #3 of 52
Quote:
Originally Posted by waytogobuddy View Post

Canada?!

Is Rogers being daft?

Roger's has no clue what it's customers want, they never have. Our only hope is for the CRTC to open up competition to US/international carriers... too bad Virgin signed on the CDMA networks but Rogers screwed that up too.
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post #4 of 52
remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?

now it looks like, hopefully, a million iphones sold by the end of the quarter.

i dont know about anyone else but this seems like a big dissapointment to me...
post #5 of 52
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post #6 of 52
Quote:
Originally Posted by waytogobuddy View Post

Canada?!

Is Rogers being daft?

Don't worry about it until European details are announced. If Canada isn't mentioned then, THEN you can start worrying
post #7 of 52
I thought this was an interesting bit of information found on Bloomberg.

"IPhones are selling at a rate of about three per day at AT&T stores, compared with about five a day at Apple's outlets. AT&T is selling the device through about 1,800 company-owned locations, while Apple has about 150 U.S. stores."


http://www.bloomberg.com/apps/news?p...d=a0eL9cCUQcQ4

Sorry I just noticed it is the same quote as the AI article.

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post #8 of 52
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post #9 of 52
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Originally Posted by city View Post

I will do the arithmatic. 5 X 150 = 750 f0r Apple and 3 X 1,800 = 5,400 for AT&T and 5,400 + 750 = 6,150 for Apple per day times 3o days is 184,500 and if I buy 1 that's 184,501 per 30 days

What about sales at the Apple website?

Still the numbers don't make sense to me either.
post #10 of 52
Quote:
Originally Posted by madeincupertino View Post

remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?

now it looks like, hopefully, a million iphones sold by the end of the quarter.

i dont know about anyone else but this seems like a big dissapointment to me...

If you get too excited, and believe all of the hype from those who would have no way of knowing, because you WANT to believe the hype, then you will always be disappointed when reality sets in.
post #11 of 52
Quote:
Originally Posted by city View Post

I will do the arithmatic. 5 X 150 = 750 f0r Apple and 3 X 1,800 = 5,400 for AT&T and 5,400 + 750 = 6,150 for Apple per day times 3o days is 184,500 and if I buy 1 that's 184,501 per 30 days

184,500 x 3 = 553,500 per quarter. The math is fine.
post #12 of 52
Quote:
Originally Posted by physguy View Post

184,500 x 3 = 553,500 per quarter. The math is fine.

That's still almost 200,000 fewer units than Reitzes is predicting. Is this shortfall made up by online sales?
post #13 of 52
Which is a long way from the burn rate of 800,000 per month needed to hit 10 million by the end of 2008.

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post #14 of 52
Quote:
Originally Posted by madeincupertino View Post

remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?

now it looks like, hopefully, a million iphones sold by the end of the quarter.

i dont know about anyone else but this seems like a big dissapointment to me...

It's not a disappointment, it was impossibly high expectations that seem to have come from nothing more than clueless "analysts" making a wild guess.

When you compare the numbers to real world ones (actual sales numbers of other phones and ipods) and not numbers from someone's wild fantasy, the numbers have been very good.

Seriously, isn't this pretty much the fastest selling phone of all time? That's a big disappointment?
post #15 of 52
new ipods anyone?
post #16 of 52
Quote:
Originally Posted by backtomac View Post

That's still almost 200,000 fewer units than Reitzes is predicting. Is this shortfall made up by online sales?

It sounds like that's what he said.
post #17 of 52
Quote:
Originally Posted by Dave Marsh View Post

Which is a long way from the burn rate of 800,000 per month needed to hit 10 million by the end of 2008.

By then, there will be a much bigger population available to buy this, plus the fact that there will be some new models somewhere along the way in 2008.

but, I don't see how you get 800,000. The number of 10 million includes the 3 million, or so (possibly more), that will be sold this year through the end of December, with the holiday season coming up next quarter.

I get 583 thousand a month for 2008.
post #18 of 52
Quote:
Originally Posted by Dave Marsh View Post

Which is a long way from the burn rate of 800,000 per month needed to hit 10 million by the end of 2008.

But it's likely not going to sell at a constant rate. Apple is assuming that sales will increase as time goes on similar to what happened with the iPod. Which is probably likely, especially so if prices drop and new models are introduced in that timeframe.
post #19 of 52
Quote:
Originally Posted by melgross View Post

If you get too excited, and believe all of the hype from those who would have no way of knowing, because you WANT to believe the hype, then you will always be disappointed when reality sets in.

Very succinctly put. This needs to be re-posted before and after every major Apple announcement.
People seem so bummed out after every event, but when they look back, using hindsight, Apple is chugging along nicely.

These numbers look good to me.
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post #20 of 52
Not sure about this math

"Based on his findings, Reitzes said it's appropriate to assume that each of AT&T's 1800 nationwide retail stores are selling at least 3 iPhone handsets per day, which alone would equate to approximately 500,000 units over the course of the quarter or about 60 percent of his fiscal fourth quarter estimate of 800,000 units."

If each AT&T store sells 3 phones a day and there are 1800 stores, that is 5,400 per day. assuming 6 days a week that is 32,400 units a week. So that would be 129,600 per month and 388,800 for the Quater just from AT&T stores. This does not count Apple stores which are likely to sell 20 units a day for small stores and around 100 per day for larger stores in major metro areas.

That is a bunch of phones.
post #21 of 52
Quote:
Originally Posted by backtomac View Post

That's still almost 200,000 fewer units than Reitzes is predicting. Is this shortfall made up by online sales?

I thought that the initial sales surge made up for the shortfall. Just because they ar selling at that rate now does not mean that the early July rate was the same...
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post #22 of 52
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Originally Posted by EagerDragon View Post

Not sure about this math

"Based on his findings, Reitzes said it's appropriate to assume that each of AT&T's 1800 nationwide retail stores are selling at least 3 iPhone handsets per day, which alone would equate to approximately 500,000 units over the course of the quarter or about 60 percent of his fiscal fourth quarter estimate of 800,000 units."

If each AT&T store sells 3 phones a day and there are 1800 stores, that is 5,400 per day. assuming 6 days a week that is 32,400 units a week. So that would be 129,600 per month and 388,800 for the Quater just from AT&T stores. This does not count Apple stores which are likely to sell 20 units a day for small stores and around 100 per day for larger stores in major metro areas.

That is a bunch of phones.

His estimate for daily Apple store sales, which seem much closer to the mark than your amazingly optimistic numbers, is 5.
post #23 of 52
Quote:
Originally Posted by backtomac View Post

That's still almost 200,000 fewer units than Reitzes is predicting. Is this shortfall made up by online sales?

Apple could easily sell 200K units in one quarter through the online store.

It is very likely that Apple will introduce some kind of an incentive (rebate/instant rebate/discount) as the Xmas shopping starts (October). Even if Apple sells only 700K iPhones this quarter, next quarter is likely to be in the millions range. Just look at how iPod sales peak during the Xmas season. If Apple can move a couple of million iPhones this Xmas quarter, this would leave about 7 millions units to be sold next year.

Next year, iPhone will be available in many additional markets (Canada, Europe). It is also very likely that Apple will introduce newer, lower cost iPhone models in January and/or June of next year, so meeting the 10 million sales goal by the end of 2008 is entirely feasible.
post #24 of 52
Actually, I do believe the buy rate will increase in the US after people begin seeing them first-hand from users and have a chance to talk about real-world issues of importance to them, vice marketing blather.

I was finally able to activate my iPhone yesterday, after waiting a month for my Verizon contract to expire, and of course I'm having a great time with it. I showed it off at work this morning, and at least one person who has been sorta-shoulda waiting for the next iteration to come out could barely contain herself as I took her through a full demo and talked about her real-world concerns. She's definitely at the tipping point, as I bet more and more people will be in the near future. The fact that Apple's now getting refurbished returns back into the pipeline at $100 off ($399 & $499) is certainly getting attention:

http://store.apple.com/1-800-MY-APPL...ified%20iPhone

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post #25 of 52
Quote:
Originally Posted by madeincupertino View Post

remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?

now it looks like, hopefully, a million iphones sold by the end of the quarter.

i dont know about anyone else but this seems like a big dissapointment to me...

A launch will always have pent-up demand. Apple did report a few hundred thousand sold over a few days at launch. Now it seems like the fall-off from opening weekend was worked into the estimates fairly accurately.

I think one interesting thing was that Apple appeared to have almost exactly the right amount of stock on-hand to meet demand. I remember the Apple of the 90's that would have a warehouse full of crap and not have a singular popular model in stock. Now you have stores being resupplied almost exactly when they run out of stock. Which means their distribution network is humming and that they probably got the price exactly right. Now that there might be a little excess capacity, maybe we'll see a price cut going into fall/holidays.
post #26 of 52
Quote:
Originally Posted by Booga View Post

A launch will always have pent-up demand. Apple did report a few hundred thousand sold over a few days at launch. Now it seems like the fall-off from opening weekend was worked into the estimates fairly accurately.

I think one interesting thing was that Apple appeared to have almost exactly the right amount of stock on-hand to meet demand. I remember the Apple of the 90's that would have a warehouse full of crap and not have a singular popular model in stock. Now you have stores being resupplied almost exactly when they run out of stock. Which means their distribution network is humming and that they probably got the price exactly right. Now that there might be a little excess capacity, maybe we'll see a price cut going into fall/holidays.

I also remember, in the '90's, when I had to wait a month for a computer, because they were so far behind because of their perennial underestimating demand because of fears of overestimating demand.
post #27 of 52
Quote:
Originally Posted by madeincupertino View Post

remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?
...

Where did you see these estimates?
post #28 of 52
Quote:
Originally Posted by badhodge10 View Post

new ipods anyone?

Ok. A limited capacity flash based touchscreen video iPod is definitely a non starter for me. I'm buying only if there's at least 80GB of storage.
post #29 of 52
Quote:
Originally Posted by madeincupertino View Post

remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?

now it looks like, hopefully, a million iphones sold by the end of the quarter.

i dont know about anyone else but this seems like a big dissapointment to me...

No. Those were the numbers being used by anti-Apple shills AFTER the event to try and pretend that the launch was a failure. Much like you.... hmm...
post #30 of 52
Quote:
Originally Posted by OldCodger73 View Post

Ok. A limited capacity flash based touchscreen video iPod is definitely a non starter for me. I'm buying only if there's at least 80GB of storage.

For me it's not the GB... it's the functionality. I've been on a 10 GB 3G iPod for like 4 years now. I don't plan to get a new one until there is a significant functionality upgrade. I don't mind if I can only fit in like 10 - 20 episodes of a series. If the next model sports the same OSX and touch screen as iPhone, then a 16 GB would be fine for me, allthough I'd prefer 32 GB. If it in fact IS an iPhone without the phone, that would be crazy. I sadly expect it to be without wifi (and camera) though. A wifi enabled iPod would possibly kill some of the iPhone sales I think.. I for one would buy the iPod, not the iPhone if this was the case.
post #31 of 52
Btw.. I suspect the next wave of iPhone sales will take off when Apple show off their software strategy sometimes this fall. They created this portable OSX so that they can start selling software on iTunes after all... didn't they?
post #32 of 52
i can't find the "1 million" estimate (which I believe was a whisper # being bandied about prelaunch) but some of the analysts were calling for 700,000 to 500,000 units sold in the first weekend.

i absolutely agree that there was a ton of pre-launch hype but still... these iphone numbers are not living up to the analysts (admitedly) overhyped expections.

"Earlier this month, in the wake of the iPhones opening weekend with press reports of huge lines at Apple and AT&T stores, analysts upped their opening weekend sales forecasts. Goldman Sachs analyst David Bailey originally predicted 350,000 in sales, but, after the devices launch, raised his prediction to 700,000. Piper Jaffrays Gene Munster likewise raised his initial estimate of 200,000 iPhones sold to 500,000."

http://www.macworld.com/news/2007/07...?lsrc=mwtoprss
post #33 of 52
Quote:
Originally Posted by physguy View Post

184,500 x 3 = 553,500 per quarter. The math is fine.

In addition, that is only the current rate: Apple=5 ATT=3 per day but just in case anyone overlooked the fact that Christmas falls in the 4th quarter, I thought I'd mention that there may be a slight uptick in the volume in the later months.

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post #34 of 52
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Originally Posted by vinney57 View Post

No. Those were the numbers being used by anti-Apple shills AFTER the event to try and pretend that the launch was a failure. Much like you.... hmm...

There were plenty of Apple fans on this site that weekend wetting their pants and talking about a million sales in a weekend, usualy followed by comments like "Your the man Steve Jobs" "F you Nokia, F You Motorola your finsished" etc.. etc.. was quite entertaining.
post #35 of 52
Quote:
Originally Posted by madeincupertino View Post

i absolutely agree that there was a ton of pre-launch hype but still... these iphone numbers are not living up to the analysts (admitedly) overhyped expections.

So what?

The predictions were made based on wild guesses with no basis in reality. They were completely clueless. What does it matter if they don't live up to expectations that were worthless in the first place, that has no bearing on whether the product is successful or not.

How can an estimate based on "long lines" be taken seriously? With the exception to a few people posting on message boards, people seem to have realized how idiotic those predictions were and stopped mentioning them at all.
post #36 of 52
Quote:
Originally Posted by Dave Marsh View Post

Which is a long way from the burn rate of 800,000 per month needed to hit 10 million by the end of 2008.

It also only counts the US and if you go to the trouble of actually READING the AI article it makes a mention of 3 further countries getting the iPhone some time in December 2007, its up to you to consider if that might have some small impact in the 10 million.. you think?
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post #37 of 52
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Originally Posted by murphyweb View Post

There were plenty of Apple fans on this site that weekend wetting their pants and talking about a million sales in a weekend, usualy followed by comments like "Your the man Steve Jobs" "F you Nokia, F You Motorola your finsished" etc.. etc.. was quite entertaining.

And now it's "So What they didn't know what they were talking about"....
post #38 of 52
Quote:
Originally Posted by steviet02 View Post

And now it's "So What... they didn't know what they were talking about"....

Well, at least the members of this forum who got all excited about outrageous numbers weren't passing them off as 'expert guidance'.
Apple never claimed the numbers being floated by the pundants... (numbers that were obviously aimed at setting the iPhone up for disappointment.)

BTW, for fun check out this bake-off between iPhone and the Nokia N95.
What's interesting isn't the results per se (iPhone wins by a nose), but the fact that no one bothers to mention the fact that someone who buys the Nokia has everything the phone will ever have to offer, while the iPhone is only beginning to show its stuff because its software driven.

http://reviews.cnet.com/4370-11399_7....html?tag=lnav
post #39 of 52
"New iPods are on the way." You got to be kidding me?
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post #40 of 52
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Originally Posted by GQB View Post

Well, at least the members of this forum who got all excited about outrageous numbers weren't passing them off as 'expert guidance'.
Apple never claimed the numbers being floated by the pundants... (numbers that were obviously aimed at setting the iPhone up for disappointment.)

BTW, for fun check out this bake-off between iPhone and the Nokia N95.
What's interesting isn't the results per se (iPhone wins by a nose), but the fact that no one bothers to mention the fact that someone who buys the Nokia has everything the phone will ever have to offer, while the iPhone is only beginning to show its stuff because its software driven.

http://reviews.cnet.com/4370-11399_7....html?tag=lnav

I agree with your points. But there are a couple of snags that will plague the iPhone.....

1. Until the break away from AT&T or at least 2.5G they will be dogged by the lack of performance when out of WIFI range. Which is often when on moving around. It's pitiful.

2. People need to be able to put 3rd party programs on the phone without hacking it.

For the iPhone to really take off those two things are going to need to happen in my opinion. The numbers floated here that were high, were accepted, the numbers that were lower not, and none of the limitations of the phone were taken into account.
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