iPhone and Mac to shine in Apple's Q2 2015 earnings, analyst says

Posted:
in General Discussion edited April 2015
After a gangbusters fiscal quarter one, Apple could see moderate gains highlighted by strong performances from iPhone and Mac over the three-month period ending March, according to noted KGI analyst Ming-Chi Kuo.




In a note obtained by AppleInsider on Saturday, the analyst is projecting iPhone, iPad, Mac shipments to come in at 58.2 million, 10.1 million and 4.5 million, respectively for Apple's second fiscal quarter of 2015. Apple Watch is also off to a good start at 631,000 initial shipments.

According to Kuo's assessment, Mac will be an area of substantial growth for the first half of 2015. For quarter two, he estimates shipments of 4.5 million units, a quarter-over-quarter decline of 17.5 percent, but back-to-school demand, the new 12-inch MacBook and a refreshed laptop lineup will drive 21.5 percent to 5.5 million units leading into fall.

On Apple Watch, Kuo feels it's too early to gauge the wearable's success. He estimates 631,000 initial shipments (curiously noted as 1Q15 shipments in the chart above), much lower than Street consensus, which anticipated Apple would push out 2-3 million units. Kuo blames supplier labor shortages and inadequate yield rates in production of key components like the haptic feedback vibrator and AMOLED display.

Further, the analyst believes Watch preorders have not yet saturated Apple's production capacity, based on output of 4.5 million units between March and June. Looking forward, Kuo projects shipments of 3.8 million units for the third quarter, once again lower than consensus, which stands at 5-10 million units.

Earlier this month, Kuo predicted Apple Watch preorders 2.3 million and production at 2-3 million units per month.

As for Apple's shrinking iPad lineup, Kuo expects that the touchscreen tablet will see a massive 52.7 percent sequential decline to just 10.1 million units. To put that in perspective, Apple sold 16.3 million iPads in the same quarter a year ago.

According to Kuo, Apple's "lackluster" iPad shipments for the March period will be largely due to "industry structural changes," rather than seasonal trends.

Finally, the analyst said that iPhone shipments have "peaked," though iPhone sales for each product cycle typically peak in the first full quarter. He expects that iPhone shipments will decline 21.8 percent sequentially to 58.2. million units, which would be yet another quarterly record for the company.

In the same quarter a year ago, Apple shipped 43.7 million iPhones. If Kuo's predictions prove accurate, Apple would increase its iPhone sales by nearly 15 million units year over year.

Apple is scheduled to reveal earnings for the second quarter of 2015 on April 27, with a conference call to follow at 2 p.m. Pacific. AppleInsider will provide live coverage of the event.
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Comments

  • Reply 1 of 128
    Good to see Ming-Chi is about as pessimistic as it gets on Watch. And Apple doesn't have to report the numbers anyway so if they don't he can claim he is right. Brilliant plan. :rolleyes:
  • Reply 2 of 128
    ecatsecats Posts: 272member
    Someone help me out, how is Apple accruing watch sales in a quarter that finishes in March, when pre-orders weren't made available until April 10, and apple accrue earnings based on shipment, not order, placing the accrual dates even further from Apple's Q2. (I.e. their invoices are written out for when they charged your card, not when you placed the order.)

    Unless that note made by the analyst is referring to Q3 (April/May/Jun for Apple) just for the watch, for which half a million watch orders seems aggressively low based on consumer sales and interest studies and apple's historical fulfilment rate. (I.e. they wouldn't go to market only able to satisfy 7,000 production units per day in the quarter (an insanely low figure for apple.)
  • Reply 3 of 128
    asciiascii Posts: 5,936member
    Quote:

    Originally Posted by TheWhiteFalcon View Post



    Good to see Ming-Chi is about as pessimistic as it gets on Watch. And Apple doesn't have to report the numbers anyway so if they don't he can claim he is right. Brilliant plan. image



    He's not saying people won't like it though, he's just saying Apple will be production constrained. And production line people seem to be where he gets his info from, so maybe he knows something WS doesn't in this case.

  • Reply 4 of 128
    dcj001dcj001 Posts: 301member
    Quote:


     As for Apple's shrinking iPad lineup, Kuo expects that the touchscreen tablet will see a massive 52.7 percent sequential decline to just 10.1 million units. To put that in perspective, Apple sold 16.3 million iPads in the same quarter a year ago


     

    Whoever believes that a 52.7% decline from 16.3 million is equal to 10.1 million is mathematically illiterate.

  • Reply 5 of 128
    rogifanrogifan Posts: 10,669member
    What is "breaking" about this?
  • Reply 6 of 128
    pfisherpfisher Posts: 758member

    The watch will eventually disappoint. People won't be upgrading every 2 years. Apple is probably going toward it's apex. Stock market may go down overall and take Apple with it. Probably not a growth stock, but more of an aristocrat stock of good dividends and ok growth, like Coke.

  • Reply 7 of 128
    shenshen Posts: 434member
    Quote:

    Originally Posted by DCJ001 View Post

     

     

    Whoever believes that a 52.7% decline from 16.3 million is equal to 10.1 million is mathematically illiterate.




    You might want to read that again. I took it as a 53% decline from last quarter, 16.3-10.7 from same quarter last year.

  • Reply 8 of 128
    shenshen Posts: 434member
    Quote:

    Originally Posted by pfisher View Post

     

    The watch will eventually disappoint. People won't be upgrading every 2 years. Apple is probably going toward it's apex. Stock market may go down overall and take Apple with it. Probably not a growth stock, but more of an aristocrat stock of good dividends and ok growth, like Coke.




    Any chance you want to tell us what numbers it will disappoint us with? Because the FUD over the watch is rather old at this point, and you might want to distinguish yourself from the Ben Frost type crowd if you actually have something to say.

  • Reply 9 of 128
    If Apple shipped 631,000 watches before they could even be pre-ordered, I have no doubt at all that pigs could fly.

    Or, this guy's smoking something really good.
  • Reply 10 of 128
    The quarter ended on March 31. So the apple watch number should be zero.
  • Reply 11 of 128
    magman1979magman1979 Posts: 1,265member
    Quote:

    Originally Posted by shen View Post

     



    Any chance you want to tell us what numbers it will disappoint us with? Because the FUD over the watch is rather old at this point, and you might want to distinguish yourself from the Ben Frost type crowd if you actually have something to say.




    I wouldn't bother with this troll shen. He's just one of BF's cronies. I've already blocked him, but unfortunately your quote made his filth appear in my comments :(

  • Reply 12 of 128
    dr millmossdr millmoss Posts: 5,403member
    None of these numbers make any sense. Apple's fiscal Q1 2015 results were reported in January. The results to be reported this month are for Q2.
  • Reply 13 of 128
    dr millmossdr millmoss Posts: 5,403member
    If Apple shipped 631,000 watches before they could even be pre-ordered, I have no doubt at all that pigs could fly.

    Or, this guy's smoking something really good.

    Or, more likely the entire story is being misreported.
  • Reply 14 of 128
    sflocalsflocal Posts: 6,019member
    shen wrote: »

    Any chance you want to tell us what numbers it will disappoint us with? Because the FUD over the watch is rather old at this point, and you might want to distinguish yourself from the Ben Frost type crowd if you actually have something to say.

    Just another of BF's boy-toys. Ignore him. Eventually he'll find someone else to get-off with.
  • Reply 15 of 128
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by Rogifan View Post



    What is "breaking" about this?



    The headline, man, the headline!

     

    Before Ming commented, everyone would have been thinking that most of Apple's earnings would have come from the sale of accessory cables, dongles and iPods.  Now we know the iPhone is going to generate most of their revenue.  Come on - no one was expecting that!

     

    And people say analysts are a waste of space - phhhht!

  • Reply 16 of 128
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by anantksundaram View Post



    If Apple shipped 631,000 watches before they could even be pre-ordered, I have no doubt at all that pigs could fly.



    Or, this guy's smoking something really good.



    Those would be the ones Ive has been handing out like sweets to all those poor people down on their luck, who couldn't otherwise afford to buy one.  I must say, looks like he's been slightly busier than the reports suggested.

  • Reply 17 of 128
    brlawyerbrlawyer Posts: 828member
    Quote:

    Originally Posted by ascii View Post

     



    He's not saying people won't like it though, he's just saying Apple will be production constrained. And production line people seem to be where he gets his info from, so maybe he knows something WS doesn't in this case.




    Considering Cook's dismal performance in terms of controlling Apple's supply chain (something he used to excel at when working as COO), given the disastrous recent launches where nothing is in plentiful stock for months (MB particularly), one should actually be surprised if results are in positive territory. 

     

    As for the AWatch, can we talk LESS about it? No matter how much propaganda we receive (or 18 articles out of 20 published on AI), this won't make it any better for such a solution in search of a problem.

  • Reply 18 of 128
    xixoxixo Posts: 431member
    pfisher wrote: »
    The watch will eventually disappoint. People won't be upgrading every 2 years. Apple is probably going toward it's apex. Stock market may go down overall and take Apple with it. Probably not a growth stock, but more of an aristocrat stock of good dividends and ok growth, like Coke.

    http://mobile.nytimes.com/2015/04/26/your-money/now-its-apples-world-once-it-was-ibms.html

    Every dog has its day...
  • Reply 19 of 128
    foggyhillfoggyhill Posts: 4,767member
    Quote:

    Originally Posted by brlawyer View Post

     



    Considering Cook's dismal performance in terms of controlling Apple's supply chain (something he used to excel at when working as COO), given the disastrous recent launches where nothing is in plentiful stock for months (MB particularly), one should actually be surprised if results are in positive territory. 

     

    As for the AWatch, can we talk LESS about it? No matter how much propaganda we receive (or 18 articles out of 20 published on AI), this won't make it any better for such a solution in search of a problem.


     

    Disastrous? Like having to fulfill 50% more order than the year before for two straight quarters and selling 130M phones in Q1 & Q2 ?

    More Iphones that got sold than in all the time Jobs was alive in two quarters.

    More phones in one quarter, than all the phones sold when Jobs was CEO (prior to january 2011)

    Hey, how does your little BS narrative work... Not so well does it?

     

    That was despite not being to stockpile them more than a month in advance because they needed IOS 8.0 to be put on it.

    You know, IOS 8, the same Operating system people said was released too early... Is he a software expert too?

    Should he waited two months more for the software to be completely stable to release the phone, despite that removing 30B in profits and leaving Apple open to the competition.

     

    Please argument your point so it can be upgraded from BS, to merely lame.

  • Reply 20 of 128
    d4njvrzfd4njvrzf Posts: 797member
    Quote:
    Originally Posted by shen View Post

     



    Any chance you want to tell us what numbers it will disappoint us with? Because the FUD over the watch is rather old at this point, and you might want to distinguish yourself from the Ben Frost type crowd if you actually have something to say.


    Keep in mind that unlike with the iPhone, customers pay the full price of the watch up front. Most people in the US finance their iPhones through two-year carrier contracts, which typically require just a nominal downpayment for the device. Many of them probably don't realize at purchase time just how much they will end up paying for the device since wireless carriers deliberately advertise only the up-front cost and until recently did not offer any discounts for bringing your own devices. People would likely think twice about upgrading if they had to drop $600+ outright every two years.

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