Apple on pace to sell record 39M iPhones in June quarter, survey finds

Posted:
in AAPL Investors edited June 2014
Continued strong demand for Apple's iPhone has the hot selling handset on pace to set yet another record in the current June quarter, the latest data from Morgan Stanley's AlphaWise survey has found.




Analyst Katy Huberty on Tuesday revealed the results of the latest AlphaWise Smartphone Tracker in a research note to investors, a copy of which was provided to AppleInsider. The data through the end of May suggests that there is demand among consumers for 39 million iPhone units in the June quarter.

Apple's previous June-quarter record came a year ago, when it shipped 31.2 million iPhones in the three-month span. That compared to 26 million units in the June 2012 quarter.

Morgan Stanley's AlphaWise surveys have been a good indicator of how much market demand there is for Apple's iPhone over the last year. The survey has outperformed Wall Street's consensus estimates in four of the last five quarters.

Notably, last quarter the survey signaled stronger than expected demand for the iPhone, driven by international expansion and carrier promotions. While market watchers expected sales of 38 million iPhones, the AlphaWise tracker pegged demand at 40.6 million units, which was closer to Apple's actual shipments of 43.7 million units.




For the current June quarter, Wall Street consensus is at 35 million iPhone units. But the latest data from Morgan Stanley suggests that demand is higher, and Apple could easily exceed those expectations.

Huberty said that iPhone unit upside could add $2.8 billion to the company's revenue for the quarter, an 8 percent bump from her predictions. She noted that supply chain build for the quarter is at 33 million units, but the supply chain tends to lag behind market demand as production ramps down near the end of a product cycle.

"Similar to the March quarter, we believe promotions from Apple, retailers and carriers are driving strong demand," Huberty wrote. She noted that Apple launched an 8-gigabyte iPhone 5c in mid-March, and that it also started promoting a trade-in program at U.S. stores in early May.

And while Apple is soaring, the latest AlphaWise figures suggest rival Samsung may be slumping. It shows that demand for the company's Galaxy handsets is down 1 percent year over year to 41 million units, with the slowdown said to be primarily from lower-priced handsets and not the latest flagship Galaxy S5.

Like most others on Wall Street, Huberty is particularly excited for Apple's next iPhone product cycle, which is expected to kick off this September, a year after the launch of the iPhone 5s. Survey data captured by Morgan Stanley suggests that if Apple were to launch a new iPhone with a larger display, as is expected, that the company would see a strong upgrade cycle from existing iPhone owners.
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Comments

  • Reply 1 of 55
    sneathsneath Posts: 10member
    Apple is doomed I tell you
  • Reply 2 of 55
    melgrossmelgross Posts: 31,253member
    I'm not concerned with record sales. I'm concerned with what the percentage of increase is. Apple needs to at least keep pace with industry sales, and preferably keep ahead of it. It will be good if Apple's sales this quarter sets a record, no doubt. But it's a competitive landscape.

    Apple had a very good May, according to reports, better than they've had for several years. I hope this June will be the same.

    The thing that set the stock up for such a recent rise wasn't stock buybacks as some would like to have us think, but rather the very good last quarter, and information about Apple's competitiveness since then. The WWDC has added to that with some major announcements that weren't expected, and announcements that were very helpful to the enterprise.

    If Apple can have another great quarter again, in which they beat average industry growth, the stock will be on more secure grounds for further growth. And if the new products, that look very good, from what we've been hearing, sell as well as thought, then Apple will be definitely back on track.
  • Reply 3 of 55
    melgrossmelgross Posts: 31,253member
    sneath wrote: »
    Apple is doomed I tell you

    That should be;

    Apple is doomed, doomed, I tell you!
  • Reply 4 of 55
    clayderclayder Posts: 16member

    doom

  • Reply 5 of 55
    clayderclayder Posts: 16member

    Quote:


    Originally Posted by melgross View Post



    I'm not concerned with record sales. I'm concerned with what the percentage of increase is. Apple needs to at least keep pace with industry sales, and preferably keep ahead of it. It will be good if Apple's sales this quarter sets a record, no doubt. But it's a competitive landscape.



    Apple had a very good May, according to reports, better than they've had for several years. I hope this June will be the same.



    The thing that set the stock up for such a recent rise wasn't stock buybacks as some would like to have us think, but rather the very good last quarter, and information about Apple's competitiveness since then. The WWDC has added to that with some major announcements that weren't expected, and announcements that were very helpful to the enterprise.



    If Apple can have another great quarter again, in which they beat average industry growth, the stock will be on more secure grounds for further growth. And if the new products, that look very good, from what we've been hearing, sell as well as thought, then Apple will be definitely back on track.

     

    the problem is the definition of "smartphone"...Most of the growth over the last few years is coming from feature phones that are now considered "smartphones". 

  • Reply 6 of 55
    melgrossmelgross Posts: 31,253member
    clayder wrote: »
    the problem is the definition of "smartphone"...Most of the growth over the last few years is coming from feature phones that are now considered "smartphones". 

    A big problem is in the definition of "Android". Most numbers include the AOSP OS phones that are at least, and likely more than half the Android market's sales. Whether that should be true is difficult to say, but I don't think it is.

    Nevertheless, it's a perception problem that needs to be addressed.
  • Reply 7 of 55

    Come on AppleInsider, Apple is doomed. You guys were promoting that for the longest time. This report must be inaccurate. In fact, I only give them a couple months before they run out of money. They already closed the R&D department A LONG TIME AGO...right? Yup, the ship is sinking!

  • Reply 8 of 55
    constable odoconstable odo Posts: 1,041member

    It's nice to know.  Usually the analysts claim poor current iPhone sales because consumers are waiting for the next iPhone model to go on sale.  The analysts always seem say that even though they're wrong most of the time.  Many consumers don't even know when the next iPhone is being released.  It's not like the average iPhone user cruises the internet sites hanging onto every little rumor of a release date.  There's probably a lot of impulse iPhone buyers where if they see a sale, they just get it and don't concern themselves about three or four months ahead.

  • Reply 9 of 55
    constable odoconstable odo Posts: 1,041member
    Quote:

    Originally Posted by melgross View Post





    A big problem is in the definition of "Android". Most numbers include the AOSP OS phones that are at least, and likely more than half the Android market's sales. Whether that should be true is difficult to say, but I don't think it is.



    Nevertheless, it's a perception problem that needs to be addressed.

    I don't think anyone cares.  They only know if it runs Android it's considered a smartphone because Android OS is a smartphone OS.  Even the simplest Android smartphone falls under the definition of a smartphone.  If it can run general purpose apps, that makes it a smartphone by definition.  Whenever Wall Street says Android is killing iOS in smartphone market share, they're not talking about specific features, cost or quality, they're only talking about those devices running Android OS.  Apparently that's enough for investors to love.

  • Reply 10 of 55
    melgrossmelgross Posts: 31,253member
    It's nice to know.  Usually the analysts claim poor current iPhone sales because consumers are waiting for the next iPhone model to go on sale.  The analysts always seem say that even though they're wrong most of the time.  Many consumers don't even know when the next iPhone is being released.  It's not like the average iPhone user cruises the internet sites hanging onto every little rumor of a release date.  There's probably a lot of impulse iPhone buyers where if they see a sale, they just get it and don't concern themselves about three or four months ahead.

    But, amazingly enough, iPhone sales slip during the year, to fall to a low the last quarter before the new models come out.
  • Reply 11 of 55
    melgrossmelgross Posts: 31,253member
    sog35 wrote: »
    Apple does not need to keep up with industry sales.  The majority of the increase in industry sales is people switching from feature phones to cheap smart phones in developing countries.  Those are $99 phones that Apple is not competing against.  You need to look at Samsung's Galaxy line.  For the past 18 months the Galaxy lines sales have been FLAT while Apple is growing sales 15-20%.  If this estimate of 39M is correct that would represent a 25% YoY.

    I disagree. While it's somewhat popular to say that when Apple's marketshare is low, the very same people trumpet it when Apple's marketshare is high.
  • Reply 12 of 55
    Quote:

    Originally Posted by melgross View Post



    I'm not concerned with record sales. I'm concerned with what the percentage of increase is. Apple needs to at least keep pace with industry sales, and preferably keep ahead of it. It will be good if Apple's sales this quarter sets a record, no doubt. But it's a competitive landscape.



    Apple had a very good May, according to reports, better than they've had for several years. I hope this June will be the same.



    The thing that set the stock up for such a recent rise wasn't stock buybacks as some would like to have us think, but rather the very good last quarter, and information about Apple's competitiveness since then. The WWDC has added to that with some major announcements that weren't expected, and announcements that were very helpful to the enterprise.



    If Apple can have another great quarter again, in which they beat average industry growth, the stock will be on more secure grounds for further growth. And if the new products, that look very good, from what we've been hearing, sell as well as thought, then Apple will be definitely back on track.

    I'm not understanding your logic. Sure, I'd lover for Apple to match or beat percentage of sales compared to the competitor (i.e. Samsung), but from a investors point of view, I mainly care about the profits over bragging rights. Apple's profits exceed that of all other smartphone sales combined. It seems that Apple can sell half as many phones as Sammy, and make twice as much money due to their margins on the phone. That comparison may not be accurate, but I'm speaking in generalities.

     

    Plus, who trusts Sammy's numbers anyways? They only report shipments and who knows how many of those devices are sitting on shelves. Even the Android % numbers are skewed because they combine smartphone and dumb phones as one and compare that to iOS...otherwise the gap is not that dramatic as others paint it.

     

    http://www.forbes.com/sites/tonybradley/2013/11/15/android-dominates-market-share-but-apple-makes-all-the-money/

  • Reply 13 of 55
    melgrossmelgross Posts: 31,253member
    I don't think anyone cares.  They only know if it runs Android it's considered a smartphone because Android OS is a smartphone OS.  Even the simplest Android smartphone falls under the definition of a smartphone.  If it can run general purpose apps, that makes it a smartphone by definition.  Whenever Wall Street says Android is killing iOS in smartphone xmarket share, they're not talking about specific features, cost or quality, they're only talking about those devices running Android OS.  Apparently that's enough for investors to love.

    But it's a legitimate question whether it really is Android if it can't run any of Google's services such as Google maps, Google Play store, Google search, calendar,, etc. This is being debated in the industry with a number of people thinking that AOSP phones should be considered as different than Android phones. I agree with that.

    I'm not the one who said that they aren't smartphones here, remember that. You can argue that point with clayder, who is saying that.

    I did say that it is a perception problem.
  • Reply 14 of 55
    Quote:
    Originally Posted by clayder View Post

     

    the problem is the definition of "smartphone"...Most of the growth over the last few years is coming from feature phones that are now considered "smartphones". 


     

    I tend to agree with this statement. For example, the LG840G is a souped-up feature phone with a touch screen, email, and java web browser. It can do some useful things, and has been good for sending txt messages (without Siri) despite not being a true smartphone. But I think a lot of low-end consumers buy it as if it's a smartphone, and probably even call it a smartphone, because in their ignorance of what a true smartphone delivers, the LG840G does more than they expected. And the awkwardness of using the interwebs is something they consider normal, because the interwebs have always been hard for them to use.  Such a device may well be getting included in the numbers as a smartphone by the analysts, who aren't much smarter than the consumers (or their phones).

     

    Then again, maybe it's a bit of blindness to say that iOS, BB, and Android qualify as "smart" OS's, while Java doesn't. It can download and use Java apps, and do essentially everything else a common smartphone can do. So if it walks like a duck and sounds like a duck.... maybe it really is a smartphone, and only chauvinists say it isn't.  And the one I got was free.

  • Reply 15 of 55
    melgrossmelgross Posts: 31,253member
    I'm not understanding your logic. Sure, I'd lover for Apple to match or beat percentage of sales compared to the competitor (i.e. Samsung), but from a investors point of view, I mainly care about the profits over bragging rights. Apple's profits exceed that of all other smartphone sales combined. It seems that Apple can sell half as many phones as Sammy, and make twice as much money due to their margins on the phone. That comparison may not be accurate, but I'm speaking in generalities.

    Plus, who trusts Sammy's numbers anyways? They only report shipments and who knows how many of those devices are sitting on shelves. Even the Android % numbers are skewed because they combine smartphone and dumb phones as one and compare that to iOS...otherwise the gap is not that dramatic as others paint it.

    http://www.forbes.com/sites/tonybradley/2013/11/15/android-dominates-market-share-but-apple-makes-all-the-money/

    Profits are important. But I doubt you were around in the late 1980's through the early 1990’s, when Apple put profits before marketshare. As their marketshare shrunk, so did software developer love. That's a vicious cycle.

    Today, Apple is doing very well indeed. But that's not assurance for the future. With their 15% worldwide smartphone share, at some point, software development will begin to move away from the platform. How low can that marketshare go before the problem becomes obvious to people such as yourself, who will then see it is a problem? People in third world countries won't always stay poor. In the worlds biggest market, China, there is a middle class that's estimated to be between 400 million to 600 million people. People whose incomes are rising much faster than anywhere else.

    This isn't a simplistic issue. Everything matters, profits, sales, and marketshare.
  • Reply 16 of 55
    melgrossmelgross Posts: 31,253member
    I tend to agree with this statement. For example, the LG840G is a souped-up feature phone with a touch screen, email, and java web browser. It can do some useful things, and has been good for sending txt messages (without Siri) despite not being a true smartphone. But I think a lot of low-end consumers buy it as if it's a smartphone, and probably even call it a smartphone, because in their ignorance of what a true smartphone delivers, the LG840G does more than they expected. And the awkwardness of using the interwebs is something they consider normal, because the interwebs have always been hard for them to use.  Such a device may well be getting included in the numbers as a smartphone by the analysts, who aren't much smarter than the consumers (or their phones).

    If it runs a third party software, then it's a smartphone. If it doesn't, then it's not a smartphone. It's not that difficult to understand.

    "Interwebs"? Seriously?
  • Reply 17 of 55
    Quote:
    Originally Posted by melgross View Post





    If it runs a third party software, then it's a smartphone. If it doesn't, then it's not a smartphone. It's not that difficult to understand.



    "Interwebs"? Seriously?

     

    Yes, I used the term "interwebs" in a mocking sense, when referring to those unsophisticated users who are generally awkward with their computers.  

     

    As to what makes a thing a smartphone, I would modify your definition a bit to be "if it is capable of running third-party software" so that it doesn't depend upon the actual availability of such third-party software.   The flaw, of course, is that even Symbion could run 3rd party software, if it was carefully integrated and installed on the phone, right?  Maybe not, I don't know much about Symbian.  Do viruses count as 3rd party software?

  • Reply 18 of 55
    melgrossmelgross Posts: 31,253member
    Yes, I used the term "interwebs" in a mocking sense, when referring to those unsophisticated users who are generally awkward with their computers.  

    As to what makes a thing a smartphone, I would modify your definition a bit to be "if it is capable of running third-party software" so that it doesn't depend upon the actual availability of such third-party software.   The flaw, of course, is that even Symbion could run 3rd party software, if it was carefully integrated and installed on the phone, right?  Maybe not, I don't know much about Symbian.  Do viruses count as 3rd party software?

    Symbian phones are/were smartphones. So were Win Mobile phones, as were Palmphones and Blackberry phones. What's the point?

    The first iPhone was a featurephone, it wasn't until the second year that it became a smartphone.

    You're being very semantic here when saying capable of running third party software rather that just saying that it runs third party software. I know that a number of people run their phones as a featurephone, because they don't download software. But I know iPhone users like that too.

    All phones that run AOSP and Android are, to my knowledge, smartphones. If you know differently, then tell me which ones, as I'd be interested to know.

    The comment about viruses was irrelevant.
  • Reply 19 of 55
    spartanspartan Posts: 21member
    Quote:

    Originally Posted by sog35 View Post

     

    If Apple sells 40M iPhones in Q3 this stock will be at $107 ($750)

     

    wow.


     

    I think they'll be at $125 by end of Q4. Stock is still massively cheap for what this company is doing and IS going to be capable of.

     

    If what we know is coming...then 2 different iPhone sizes AND the iBand/iWatch plus new iPads...it's going to be an absurd quarter.

     

    Get in now again while you can.

  • Reply 20 of 55
    Quote:
    Originally Posted by melgross View Post



    Symbian phones are/were smartphones. So were Win Mobile phones, as were Palmphones and Blackberry phones. What's the point?



    The first iPhone was a featurephone, it wasn't until the second year that it became a smartphone.

    Right, I was misunderstanding Symbian and confusing it with something else.  Fixed.

    Why do you say the first iPhone was a featurephone?

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