Apple on pace to sell 53M iPhones in June quarter, Apple Watch demand sustaining 'healthy' levels

Posted:
in AAPL Investors edited July 2015
Demand for Apple's flagship iPhone 6 and iPhone 6 Plus remains extremely strong, even as the product cycle begins to wind down, while consumer interest in the Apple Watch is outperforming the first iPhone, new data reveals.




Morgan Stanley on Wednesday published the findings of its latest AlphaWise Trackers, the results of which were shared with AppleInsider. Analyst Katy Huberty revealed that the data shows demand for the iPhone is estimated at about 53 million units for the June quarter, with particularly strong interest coming from China.

Corroborating these figures are supplier estimates in Asia, which peg Apple to build about 54 million iPhones in the quarter. Huberty believes Apple is looking to add some channel inventory with excess units, as the company exited the March quarter at the low end of their 5-to-7-week range.

As for the Apple Watch, Morgan Stanley's data has found that demand for the wrist-worn device is stabilizing at a level 20 percent higher than the first-generation iPhone six weeks after launch. The AlphaWise survey compiles sell-through data using Web search analysis.

"Watch interest in the week of launch was about half that for the first iPhone, but the Watch has seen a much smaller deceleration since the initial spike," Huberty wrote. "Both products had limited distribution at the beginning --?iPhone at AT&T and Watch on the Apple online store --?but the Watch has seen more supply constraints due to some component issues and we believe likely conservative demand forecasts by Apple."




Looking forward to the anticipated "iPhone 6s" launch, Huberty said that Asian suppliers have indicated that build plans are roughly flat year over year when compared to the iPhone 6. But she believes that there might be considerable consumer demand for a cheaper iPhone 6, assuming it takes the $99 on-contract price point once a new model launches.

Regardless, investor expectations headed into the "iPhone 6s" product cycle are low, Huberty said, as most on Wall Street do not believe that Apple will be able to grow unit sales at a considerable clip in fiscal year 2016.

"While we anticipate iPhone growth will decelerate from (fiscal year 2015) and it could take some time for users and developers to find more compelling use cases for the Watch, our surveys and trackers have consistently showed stronger than expected demand for both products over the next few quarters," she wrote.

Morgan Stanley's "base case" for shares of AAPL sees them reaching $166, while the its more optimistic "bull case" forecasts a price of $195 per share. The firm has maintained its "overweight" rating for Apple stock.
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Comments

  • Reply 1 of 61

    Apple seems to be able to sell every watch it can make right now - I'd call that beyond "healthy".

  • Reply 2 of 61
    dasanman69dasanman69 Posts: 12,980member
    Hard to believe we're just a little over 2 months away from a new iPhone. Where does the time go?
  • Reply 3 of 61
    SpamSandwichSpamSandwich Posts: 31,098member
    Huberty has a poor track record, so take this note with a grain of salt.
  • Reply 4 of 61
    danielswdanielsw Posts: 905member

    Got my iPhone 6+ right after they were released, on AT&T's Next. So I'm ready to upgrade in the fall to the 6S+. Love what I have, can't wait for what's next.

     

    Got my Apple Watch for Fathers Day and love it.

     

    I was in three Apple Stores over the weekend, and every one had people hovering over the watch display. And I saw numerous customers and staff wearing them.

  • Reply 5 of 61
    monstrositymonstrosity Posts: 2,203member
    Quote:

    Originally Posted by dasanman69 View Post



    Hard to believe we're just a little over 2 months away from a new iPhone. Where does the time go?



    Agreed. Seems like only last week I got my 6+.

  • Reply 6 of 61
    totaltotal Posts: 83member

    how many iphones Apple sold a year ago, 54M versus ?? 

  • Reply 7 of 61
    rogifanrogifan Posts: 10,669member
    danielsw wrote: »
    Got my iPhone 6+ right after they were released, on AT&T's Next. So I'm ready to upgrade in the fall to the 6S+. Love what I have, can't wait for what's next.

    Got my Apple Watch for Fathers Day and love it.

    I was in three Apple Stores over the weekend, and every one had people hovering over the watch display. And I saw numerous customers and staff wearing them.

    It's interesting how people's anecdotes are always different than the meme out there. The meme is Apple Watch is a dud. Yet I see more and more posts like this from people saying just the opposite.
  • Reply 8 of 61
    rogifanrogifan Posts: 10,669member
    total wrote: »
    how many iphones Apple sold a year ago, 54M versus ?? 

    35.2M in fiscal Q3 2014.
  • Reply 9 of 61
    totaltotal Posts: 83member
    Quote:

    Originally Posted by Rogifan View Post





    35.2M in fiscal Q3 2014.

    hmm that would be +50% YoY, crazy!

  • Reply 10 of 61
    mac_128mac_128 Posts: 3,428member
    rogifan wrote: »
    It's interesting how people's anecdotes are always different than the meme out there. The meme is Apple Watch is a dud. Yet I see more and more posts like this from people saying just the opposite.
    Well, we'll get some idea of what's actually happening next month with the 2nd quarter results, after the reported jump in the "other" category as it relates to the previous four quarters.

    As for annecdotal observations, I live in LA, and have not seen a single ?Watch in the wild. It's interesting they compare it to the original iPhone and it's similar supply constraints, since the month after it launched I saw dozens of iPhones in use around town, compared to the two months the watch has been shipping. And I fully acknowledge there's any number of reasons for that. But that's why annecdotal evidence if proof of nothing other than one person's experience. I expect having the watch in the stores such that a customer can not only try it on, but walk out the door with it, will create a boost in watch sales. Without wanting to start a renewed debate, the idea of having to go into a store to try on a watch, then return home to order it, then wait up to a month or more in some cases is antithetical to the proven U.S. a consumer experience. The fact Apple is finally rectifying this will certainly improve the watch buying experience for the average consumer, and likely result in greater sales.
  • Reply 11 of 61
    matrix07matrix07 Posts: 1,993member
    total wrote: »
    hmm that would be +50% YoY, crazy!

    *If* true.
  • Reply 12 of 61
    bageljoeybageljoey Posts: 1,755member
    rogifan wrote: »
    It's interesting how people's anecdotes are always different than the meme out there. The meme is Apple Watch is a dud. Yet I see more and more posts like this from people saying just the opposite.
    Yeah. I haven't seen any in the wild, but many people have seen mine! :)
    I know that two people (that I know of) ordered theirs after seeing mine and talking to me. I think a lot of people have interest, but are waiting to pull the trigger. Sales could snowball as availability and awareness increases.

    OTOH, my parents said "Oh, but people are having problems with Apple Watches, aren't they?" They could not specify what they heard (I'm guessing it was the grumbling about availability and long initial shipping waits) but they had a generally negative impression of the Watch. I often use their impressions as a barrometer of non-tech sentiment out there...
  • Reply 13 of 61
    rogifanrogifan Posts: 10,669member
    mac_128 wrote: »
    Well, we'll get some idea of what's actually happening next month with the 2nd quarter results, after the reported jump in the "other" category as it relates to the previous four quarters.

    As for annecdotal observations, I live in LA, and have not seen a single ?Watch in the wild. It's interesting they compare it to the original iPhone and it's similar supply constraints, since the month after it launched I saw dozens of iPhones in use around town, compared to the two months the watch has been shipping. And I fully acknowledge there's any number of reasons for that. But that's why annecdotal evidence if proof of nothing other than one person's experience. I expect having the watch in the stores such that a customer can not only try it on, but walk out the door with it, will create a boost in watch sales. Without wanting to start a renewed debate, the idea of having to go into a store to try on a watch, then return home to order it, then wait up to a month or more in some cases is antithetical to the proven U.S. a consumer experience. The fact Apple is finally rectifying this will certainly improve the watch buying experience for the average consumer, and likely result in greater sales.

    Obviously there wasn't the supply available to have in stores. It's not like people were ordering watches online and having them ship within 3-5 business days.
  • Reply 14 of 61
    slurpyslurpy Posts: 5,142member

    I was in Toronto for several days, and saw a bunch of Apple Watches in the wild. 

  • Reply 15 of 61
    hpaulhhpaulh Posts: 14member
    You don't get around a lot in LA then. I got my Apple Watch the first week released, and I've seen a number of them...and increasing every week. Two days ago I saw my watch on the front desk clerk's arm at my breakfast spot in South Pasadena - Shakers. I said, "Hey, you're wearing my watch and you've got the same band on (Milanese)." He said, "Yes, and it cost me $700 bucks and I love it!"

    Why don't we stop comparing the watch to the iPhone sales curves. Aren't they kind of different, even though one depends on the other?
  • Reply 16 of 61
    trumptmantrumptman Posts: 16,455member
    Quote:

    Originally Posted by Mac_128 View Post

     
    Quote:

    Originally Posted by Rogifan View Post



    It's interesting how people's anecdotes are always different than the meme out there. The meme is Apple Watch is a dud. Yet I see more and more posts like this from people saying just the opposite.


    Well, we'll get some idea of what's actually happening next month with the 2nd quarter results, after the reported jump in the "other" category as it relates to the previous four quarters.



    As for annecdotal observations, I live in LA, and have not seen a single ?Watch in the wild. It's interesting they compare it to the original iPhone and it's similar supply constraints, since the month after it launched I saw dozens of iPhones in use around town, compared to the two months the watch has been shipping. And I fully acknowledge there's any number of reasons for that. But that's why annecdotal evidence if proof of nothing other than one person's experience. I expect having the watch in the stores such that a customer can not only try it on, but walk out the door with it, will create a boost in watch sales. Without wanting to start a renewed debate, the idea of having to go into a store to try on a watch, then return home to order it, then wait up to a month or more in some cases is antithetical to the proven U.S. a consumer experience. The fact Apple is finally rectifying this will certainly improve the watch buying experience for the average consumer, and likely result in greater sales.

     

    My co-worker purchased one but returned it. I had the option of getting one but found a smoking deal on a Garmin Fenix 3. Strangely I saw a couple while hanging out on Catalina for a week.

     

    I love getting notifications on my wrist. It is awesome. I can see where Apple is going with this. I haven't read much about the heart rate monitor yet in terms of accuracy for activities.

     

    I also need my watch to be waterproof and a bit rugged. I don't know if Apple will ever go there with the Apple watch.

     

    Garmin has ConnectIQ which so far has been terrible in terms of apps. Apple will kill them there. That said if there is a future Fenix watch that lets me reply to my iPhone via a microphone and Siri and also has a built in activity accurate heart rate monitor, then I'll have the perfect watch.

     

    Apple would need to add GPS on watch, create a workout app with the level of sophistication shown in Garmin products while also allowing it to export or send info to all the major fitness services (Strava, Garmin Connect, etc.)

     

    While Apple Watch gen 1 has some short comings, gen 3 might be perfect for me.

  • Reply 17 of 61
    brucemcbrucemc Posts: 1,527member
    Quote:

    Originally Posted by DanielSW View Post

     

    Got my Apple Watch for Fathers Day and love it.

     

    I was in three Apple Stores over the weekend, and every one had people hovering over the watch display. And I saw numerous customers and staff wearing them.


    I also received an ?Watch for Father's Day.  While I am really enjoying mine - for starters the bands and fit make it the most comfortable watch I have ever worn - I will say I have seen few in the wild, and the activity at the Apple store was low in the watch section (I was only one buying on that Father's Day afternoon with the 45min span I was there).  That said, it has only been less than a week that the watch is available at retail, and many are likely not aware of the fact.

     

    I think this is a product that will have good initial demand for the early adopters, but it will grow more slowly over time than the iPad (to this date Apple's fastest growing product for first 3 years).  People need to use it and experience it to fully appreciate it.  And services like Apple Pay need to grow more widely.

  • Reply 18 of 61
    jungmarkjungmark Posts: 6,687member
    The Apple fans are buying second iPhones to pad Apple's numbers. /s
  • Reply 19 of 61
    mr omr o Posts: 1,046member
    Quote:

    Originally Posted by trumptman View Post

     

    While Apple Watch gen 1 has some short comings, gen 3 might be perfect for me.


     

     

    Apple usually gets it right from the fourth generation:

     


    1. iPod 4

    2. iPhone 4

    3. iPad air (which was actually a fifth generation product, 1 year after the mini)

  • Reply 20 of 61
    eightzeroeightzero Posts: 2,354member
    Quote:

    Originally Posted by Rogifan View Post





    35.2M in fiscal Q3 2014.

    I'm thinking they could afford send Taylor Swift a free one. You know...just to try to kiss and make up.

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