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Data suggests Apple has cruised past 10 million iPhone goal

post #1 of 68
Thread Starter 
An effort on the part of members of Mac Observers AFB to track IMEI iPhone numbers has led two technology analysts to conclude that Apple has drastically surpassed analyst Q4 iPhone sales estimates, and reached its goal of selling 10 million iPhones in 2008 three months early.

The consensus estimates for iPhone sales figures for Apples Q4 (calendar Q3) were calling for approximately 4 million units. It now appears that Apple has sold at least 7 to 7.5 million iPhones in Q4 -- nearly 80% above consensus. Apple has far surpassed even Gene Munsters bullish estimates of 5 million iPhone sales in Q4 according to the data.

At MacWorld 2007, when Apple was trading at the same price it is today, Steve Jobs and Apple set a bold goal of selling 10 million iPhones in 2008. Despite Apples consistent reassurances of meeting its goal, bearish analysts repeatedly raised irrational concerns about whether Apple could reach such lofty sales figures. In January, Bernstein Research analyst Toni Sacconaghi, an analyst who rarely comments on Apple, started the missing iPhones controversy which led to a herd of naive analysts to reduce their iPhone sales estimates to numbers that fell well below Apples 10 million iPhone goal for 2008. Sacconaghi forecasted that Apple would only sell 7.9 million iPhones in the period. This obviously put considerable pricing pressure on shares of Apple in February.

Kathryn Huberty of Morgan Stanley estimated that Apple would only sell 9.3 million iPhones for the year. Apple now appears to be on track to sell nearly double that number. Yet, Huberty and Sacconaghi weren't the only ones to grossly underestimate the company's iPhone performance. Keith Bachman of BMO Capital also jumped on bandwagon in February when he estimated that Apple would only sell 8.5 million iPhones in 2008. Scott Craig of Bank of America also maintained bearish iPhone estimates in February with an 8 million iPhone sales target. Several other analysts followed suit and are now likely to be proven wrong.

IMEI Number Tracking by Mac Observers AFB

An IMEI number or an International Mobile Equipment Identity number is a unique 15 digit code assigned to each individual iPhone found on the back of the box in which an iPhone is packaged. Within this 15 digit code are two 6-digit numerical sequences crucial to determining the number of iPhones being produced. One 6 digit number, known as the TAC, or Type Allocation Code, signifies a particular build or set of iPhones being manufactured. The second 6 digit number is unique to each individual iPhone produced in that particular seriesso that 1 million iPhones can be registered to a specific TAC. In other words, one six digit code, known as the TAC, signifies a set of iPhones being produced whereas the other six digit code signifies each individual iPhone within the TAC set.

Investor Village's AAPL Sanity Board member 'howlongtoretire,' along with members at the Apple Finance Board at Mac Observer, have been collecting IMEI numbers [spreadsheet] from new 3G iPhones sold during the period, and have been maintaining a spreadsheet of iPhone IMEI data points along with the purchase date, model, and production week. By early September, Apple was on its eighth TAC, meaning that 8 million 3G iPhones had already been manufactured. The actual number of handsets sold versus manufactured depends on a variety of factors including the amount of inventory Apple carries in its retail chain, defects that were destroyed, defects that were sold and then exchanged, display models etc.

However, the latest IMEI data point collected by AFB was 9,190,680 -- an 8GB Black iPhone recorded as manufactured on September 29 and sold on October 5. This suggests that even if a whopping 1.5 million iPhones of the total IMEI registered devices are unsold as of today, an unlikely assumption, it would still put 3G iPhone sales at 7.6 million units and 2008 iPhone sales at over 10 million units. Coming into the quarter, Apple had already sold 2.42 million iPhones. Thus, 7.6 million 3G iPhones sold puts Apple above 10 million units for the year.

Net Applications OS Market Share:

The Net App OS share measurements based on web usage data lends further support to the IMEI tracking conclusions. In the weeks leading up to the 3G launch, iPhone OS share was rather consistent hovering at 16 bps. During this period, the population of iPhones remained static at 6 million units because inventory dried up weeks before. The share readings began to rise sharply subsequent to the 3G introduction. Due to the volatility and noise present in the data over the quarter, its not possible to make granular assessments. However, for the last few weeks of the September quarter, iPhone OS was averaging 34 bps. This suggests iPhone units increased by 6.75M. A small portion of legacy iPhones were replaced by 3G models resulting in those sales having no effect OS market share readings. Sales into the channel are not represented in the Net Applications measurement since the device is yet to reach the end-consumer. This data together with the IMEI Number Tracking by the AFB highly suggests that Apple more than likely sold at least 7 million iPhones in Q4 and that Apple has surpassed its 10 million iPhone target.

Disclosure: Both Andy Zaky and Turley Muller are Long Apple.
post #2 of 68
Great job Andy & Turley. Hope you both can hang around on this thread to answer any further questions we might have. Clearly, July-Aug-Sep was some crazy ass iPhone 3G selling around the world. Now we have some data. 10 million iPhone thingys before the holiday season.

Another 10 million to go by the end of the year.
post #3 of 68
Andy/others, if possible, what evidence can we show to strongly suggest that AAPL is trading at massive discounts right now at about $92+ pre-market opening?
post #4 of 68
Once again the naysayers are proved wrong. When will people learn!?
post #5 of 68
Quote:
Originally Posted by nvidia2008 View Post

Clearly, July-Aug-Sep was some crazy ass iPhone 3G selling around the world.

I was at a mall this weekend with an Apple Store inside. There was no longer a line for iPhones but there were people waiting around for them and most of the staff was helping people with buying iPhones. Some of them looked like entire families buying them. Too bad none of that will help the stock price.

Quote:
Originally Posted by nvidia2008 View Post

Andy/others, if possible, what evidence can we show to strongly suggest that AAPL is trading at massive discounts right now at about $92+ pre-market opening?

Crazy market! Even my blue chips are down quite a bit in re-market.
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post #6 of 68
If the estimate is correct, that would put Apple ahead of RIM globally in terms of number of phones sold in Q4. According to RIM's most recent earnings report, they have sold about 6.1 million phones globally.
post #7 of 68
Basing sales estimates on IMEI numbers is a very dangerous game. There's too many factors which could skew the results.

Let's wait for the official numbers as I'm sure they'll be good.
post #8 of 68
Wow. Yahoo Finance now has real time quotes.
post #9 of 68
Quote:
Originally Posted by nvidia2008 View Post

Andy/others, if possible, what evidence can we show to strongly suggest that AAPL is trading at massive discounts right now at about $92+ pre-market opening?


Apple is trading at a lower price because the total market is going down. Doesn't take much to understand that. Look at the business/finance info before asking silly questions!!!
post #10 of 68
Quote:
Originally Posted by Dorotea View Post

Apple is trading at a lower price because the total market is going down. Doesn't take much to understand that. Look at the business/finance info before asking silly questions!!!

Umm... It's pretty freakin' low, my dear. My question would be, why $90? Why not $100? Why not $70 to $80. That's what analysts and people that "look at the business/finance info" should be able to answer.

To say "Oh because the whole market is down!" is ludicrous. That implies extreme irrationality. I think there is irrational behaviour, but not so extreme as to be "OMFG SELL EVERYTHING"... There must be more signal in the noise.

I wasn't in a freakin' cave the past few months, BTW. Of course I've looked at the news. We know how rubbish news is, Andy Zaky has made some insightful comments before, so let him and others make it, if you have nothing substantial to contribute.
post #11 of 68
Quote:
Originally Posted by RichL View Post

Basing sales estimates on IMEI numbers is a very dangerous game. There's too many factors which could skew the results.

Let's wait for the official numbers as I'm sure they'll be good.

Additionally, comparing iPhone OS 1.x web usage numbers against users of iPhone OS 2.x is a little shaky. A lot of those third party apps basically contact web sites on the back end but make it a lot easier to use, thus higher numbers for the same handset.
post #12 of 68
Wow.

In a best case scenario, that would add another $0.10 to per share earnings for the quarter as well as the next seven. That's about 10% above expectations.

When they release earnings, what could they possibly say that will push shares lower still?
post #13 of 68
Quote:
Originally Posted by aaarrrgggh View Post

...When they release earnings, what could they possibly say that will push shares lower still?

That Apple went and built its own factory to make consumer electronics.
post #14 of 68
Quote:
Originally Posted by Dorotea View Post

Apple is trading at a lower price because the total market is going down...

The charts show that AAPL is being hammered far more in the past week than Nasdaq, DJ, SP500.
post #15 of 68
Quote:
Originally Posted by nvidia2008 View Post

The charts show that AAPL is being hammered far more in the past week than Nasdaq, DJ, SP500.

Typical market move for tech companies. They also rebound a lot faster, too.
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post #16 of 68
Quote:
Originally Posted by nvidia2008 View Post

The charts show that AAPL is being hammered far more in the past week than Nasdaq, DJ, SP500.

IMO its partly because there is currently oodles of bullshit reporting on Apple (not normally on appleinsider, thats why I come here).
Almost everything I read is complete nonsense, written by people who are full of shit, who...

a) Have no idea about Apples business model
b) Will financially benefit by seeing Apple fail
c) Are attention seeking morons looking for page hits

And as there are many companies and individuals in Apples firing line, there are MANY people who wish to see apple fail.
All those people who have spent the last 20 years trained up in microsoft (just as example), feel a little threatened right now no doubt.

Almost everyone I speak to (who reads the nonsense) is currently brainwashed into thinking Apple is dead.
No matter what I say to them, they believe what they have read over the information I give them, which I find annoying. Especially as I tipped many of them off at $10 a share when the same reporters/analysts were reporting apple as dead 10 years ago.

They never learn!!!
And it annoys the hell out of me.
post #17 of 68
Just wait for Halloween. 10 days after earnings report, AAPL will be up considerably and you will be alot happier.
post #18 of 68
Quote:
Originally Posted by nvidia2008 View Post

To say "Oh because the whole market is down!" is ludicrous. That implies extreme irrationality. I think there is irrational behaviour, but not so extreme as to be "OMFG SELL EVERYTHING"... There must be more signal in the noise.

So, the current panic in the house has nothing whatsoever to do with the recent drop of Apple's shares? I'll bite. So what's the fundamental base for this drop then? That Apple's share in laptops is surging like hell? That iPhones are selling like hell? Hmmm, that doesn't fit, now does it?

The markets are acting extremely irrational these days. They fear that a deep recession will plunge Apple's core market, that people in a recession won't buy Apple's products. They take Apple as one of the most fragile companies out there if there's a recession, and people now are very weary of where they are going to put money. It's not that there is a lot of "sell", but I bet that there is too little of "buy".

Now, if you believe otherwise, I think that it is a good time to buy Apple's shares. Perhaps wait a bit longer until they go deeply to the 60 dollar level. If you are also in fear, then sell. There's nothing better than time to tell us who's right or wrong, though.
post #19 of 68
Quote:
Originally Posted by monstrosity View Post

IMO its partly because there is currently oodles of bullshit reporting on Apple (not normally on appleinsider, thats why I come here).
Almost everything I read is complete nonsense, written by people who are full of shit, who...

You forgot to mention the heart attack news about El Comandante. I'm sure some people sold their AAPL the moment they read those two words connected with Jobs.
post #20 of 68
The market is down, yes...but haven't I been reading stories here on AI talking about how Apple is expected to grow despite the economic drag? So AAPL goes from $200 a few months ago down to $90...when they are pumping out ever-more Macs, iPhones, and iTunes?? Again, I'm not naive...I realize the whole market is down...but 55%???? Can we blame this on the "speculators" too???
post #21 of 68
Quote:
Originally Posted by LuisDias View Post

You forgot to mention the heart attack news about El Comandante. I'm sure some people sold their AAPL the moment they read those two words connected with Jobs.

Indeed, but I felt that was covered under news reporters of type 'B' who "Will financially benefit by seeing Apple fail"

post #22 of 68
Quote:
Originally Posted by LuisDias View Post

So, the current panic in the house has nothing whatsoever to do with the recent drop of Apple's shares? I'll bite. So what's the fundamental base for this drop then? That Apple's share in laptops is surging like hell? That iPhones are selling like hell? Hmmm, that doesn't fit, now does it?

There are a few factors.

Last week there was a false rumor that Jobs had a heart attack that dinged the price.

There were also a couple downgrades that don't seem to be based on Apple numbers at all, just the wild guess that the economy is bad so they assumed that people would stop buying Apple product.

Personally I think it's a great contrarian play since the price seems to be based on people panicking and not because apple is weak. The only question is whether to get in now or wait and see if it goes lower.

Any opinions on that?
post #23 of 68
Quote:
Originally Posted by monstrosity View Post

Almost everything I read is complete nonsense, written by people who are full of shit, who...

a) Have no idea about Apples business model
b) Will financially benefit by seeing Apple fail
c) Are attention seeking morons looking for page hits

It works both ways. Apple news is always very polarizing - either they're the second coming of Jesus or they're a company in crisis. There's no middle-ground, no-one looking at the company objectively and without bias.

Apple's intense secrecy and paranoia (see: the recent iPhone NDA announcement) doesn't help things either. Their own hype machine builds Apple up to a God-like status. When reality doesn't match expectations, bad things happen.

Their stock, like many other tech stocks in the past, has probably been over-valued. They're an industry leading company but they're not perfect and they're certainly not immune to macro-economic effects.
post #24 of 68
Quote:
Originally Posted by monstrosity View Post

Indeed, but I felt that was covered under news reporters of type 'B' who "Will financially benefit by seeing Apple fail"


Oops. Sorry!
post #25 of 68
Quote:
Originally Posted by drjjones View Post

Just wait for Halloween. .

Uh maybe Apple will trick or treat us in Belgium as for the moment
iphone Belgium
The iPhone3G has arrived in Belgium
Unfortunately we are out of stock on our website.

Three months now. It seems that each mobistar Center recieves 6-8 iPhones a week....on a random day at a random time.....
post #26 of 68
Quote:
Originally Posted by minderbinder View Post

There are a few factors.

Last week there was a false rumor that Jobs had a heart attack that dinged the price.

There were also a couple downgrades that don't seem to be based on Apple numbers at all, just the wild guess that the economy is bad so they assumed that people would stop buying Apple product.

Personally I think it's a great contrarian play since the price seems to be based on people panicking and not because apple is weak. The only question is whether to get in now or wait and see if it goes lower.

Any opinions on that?



I personally believe that it would be terrible to miss aapl at this price, to hang on longer may mean missing the rocket on the way back up.
One of 3 dates will be the catalyst IMO,
a) oct 14,
b) quarterly results,
c) or next quarterly results.

There is a slight possibility that this coming quarterly results could be negatively span by the media even though in general they will no doubt be good.

I have just bought some more myself.
post #27 of 68
Quote:
Originally Posted by monstrosity View Post

There is a slight possibility that this coming quarterly results could be negatively span by the media even though in general they will no doubt be good.

It'll be good, but I doubt it will be good enough, especially when looking at year-over-year growth. It'll probably outshine all the other PC vendor's growth, but the stock will suffer. Then we'll hear Apple's conservative Q1-2008 predictions, which will drop it even more.

The issues with the stock are not Apple's fault, we'll just have to wait for the economic fear to subside before we start seeing some real growth in the stock value.
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post #28 of 68
Quote:
Originally Posted by solipsism View Post

The issues with the stock are not Apple's fault, we'll just have to wait for the economic fear to subside before we start seeing some real growth in the stock value.

Exactly. People are even discussing a <i>depression</i>. In this climate of fear, it's quite unpredictable how low is AAPL's going to reach.
post #29 of 68
Quote:
Originally Posted by nvidia2008 View Post

Wow. Yahoo Finance now has real time quotes.

Google Finance has had it for a few weeks now...
post #30 of 68
Quote:
Originally Posted by AHeneen View Post

The market is down, yes...but haven't I been reading stories here on AI talking about how Apple is expected to grow despite the economic drag? So AAPL goes from $200 a few months ago down to $90...when they are pumping out ever-more Macs, iPhones, and iTunes?? Again, I'm not naive...I realize the whole market is down...but 55%???? Can we blame this on the "speculators" too???

OK... not to get too technical here, but Apple has a beta of around 2 (a measure of the sensitivity of the stock's returns to market movements; the market itself has a beta of 1, by definition) -- i.e., on average, AAPL would be expected to drop by about 2% for every 1% drop in the market.

The market is down about 30% from its high for the year.
post #31 of 68
Quote:
Originally Posted by AppleInsider View Post

Thus, 7.6 million 3G iPhones sold puts Apple above 10 million units for the year.


Behold the power of 3G. Toldja so.

Too bad the stock market appears not to give a crap right now. Maybe in a few months.


...
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post #32 of 68
Quote:
Originally Posted by monstrosity View Post

Once again the naysayers are proved wrong. When will people learn!?

Estimates aren't proof.

Quote:
Originally Posted by Dorotea View Post

Apple is trading at a lower price because the total market is going down. Doesn't take much to understand that. Look at the business/finance info before asking silly questions!!!

I think a major part of the real root cause is short-term thinking. Among many other factors.

Quote:
Originally Posted by LuisDias View Post

Exactly. People are even discussing a <i>depression</i>. In this climate of fear, it's quite unpredictable how low is AAPL's going to reach.

That's quite unfortunate too, the fear and discussions are out of whack for the most part. The stories and articles explaining why the fears are overblown don't seem to get much attention. The fearmongering is what brings in the hits, the ratings, etc.
post #33 of 68
Quote:
Originally Posted by JeffDM View Post

Estimates aren't proof.

If sales are not above 10mil i will eat my cat.
post #34 of 68
I'm skeptical. Interesting deduction, but the IMEA numbers would likely include a possible future sale that may occur 3 or 6 months down the line. I'd wait for Apple's conference call or a press release myself. It's not to say I don't believe they'll sell 10m, but now, great if true, but I'm skeptical.
post #35 of 68
Quote:
Originally Posted by THT View Post

I'm skeptical. Interesting deduction, but the IMEA numbers would likely include a possible future sale that may occur 3 or 6 months down the line. I'd wait for Apple's conference call or a press release myself. It's not to say I don't believe they'll sell 10m, but now, great if true, but I'm skeptical.

I seriously doubt Apple has 3-6 of inventory on hand.
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post #36 of 68
I would like to know what factors led to many analysts were wrong so widely in their estimations
about the sales of the iPhone, or in other case what caused Apple to exceed even their own estimates.
post #37 of 68
Apple's getting hammered because lots of people are losing their savings and should be worried about how long they're going to keep their jobs. Not as much pocket money this fall, which means less Macbooks and iPods and iPhones for the kids as back-to-school/xmas gifts, which means less sales for Apple.

At this point, the financial crisis is hitting middle class folks super hard, as nobody knows what's going to happen to their savings/investments/jobs in the financial&banking sector, and those are the folks that buy Apple products. Hopefully Apple is about to release some cheaper products soon, as there probably aren't going to be too many in the market for expensive Macbook Airs/iPhones, etc. for the next little while.

Sure, all the Apple news looks great, but the figures are all pre-market crash/investment bank failures, so we won't really know what the impact for a little while. I was at an Apple store here in Copenhagen on Saturday to look at the new iPods, and the guy working there said that sales have been noticeably slower over the past week and a half, and here in Denmark the media and government are still downplaying things considerably. In England and the US, where the panic seems a lot higher, I bet the entire electronics industry is suffering from some seriously slow sales.

The fact that Apple doesn't have any low-priced products other than the shuffle hurts them, as folk who "must" purchase a new computer or phone are now more likely to buy a budget-type product than 3 weeks ago...

I fully expect the Apple share price to continue moving downward at a faster rate than most companies, just because it isn't as diverse price-wise as an Acer or Dell type company, and that will hurt in the coming months.
post #38 of 68
Quote:
Originally Posted by solipsism View Post

I seriously doubt Apple has 3-6 of inventory on hand.

Yeah, I agree with you there! Brain fart. Inventory is running 4-6 weeks for Macs. Not sure about iPhones. However, inventory and when phones are sold shouldn't be that tightly coupled. I'm wondering if they ramped up the inventory for the Christmas season though. There could be a lot of inventory right now.
post #39 of 68
Quote:
Originally Posted by monstrosity View Post

I personally believe that it would be terrible to miss aapl at this price, to hang on longer may mean missing the rocket on the way back up.
One of 3 dates will be the catalyst IMO,
a) oct 14,
b) quarterly results,
c) or next quarterly results.

Oct 14 is out. Whatever the "brick" is, it will disappoint by what it isn't. And remember that the Cube was introduced in the teeth of a recession (enough said about That).

Quarterly results are irrelevant at this point. Everyone KNOWS that they will be spectacular, so if they are, so what; and if they aren't, guess what. What's going on with the rest of the PC world is irrelevant.

Next quarterly results are the best bet, but with what will probably be happening at that time, I suspect that it will take several more quarters of Significantly Outperforming the tech sector before APPL gets its luster back. Just remember, there is always the "OK, so this quarter was good, but just wait for the next one, blah, blah, blah."
post #40 of 68
Quote:
Originally Posted by Domadis View Post

I would like to know what factors led to many analysts were wrong so widely in their estimations
about the sales of the iPhone, or in other case what caused Apple to exceed even their own estimates.

Analysts talk rubbish.
&
Apple has a habit of deliberately underestimating.
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