UBS sees record 75M holiday iPhone sales driven by Apple's lower priced models

Posted:
in AAPL Investors
Investment firm UBS believes Apple sold a record number of iPhones during the just-concluded December quarter, but that fewer customers opted for Apple's high-end models when compared to a year prior, based on new market research.




Citing the latest data from Consumer Intelligence Research Partners, UBS analyst Steven Milunovich predicted on Wednesday that the average selling price of the iPhone was $662 last quarter. If true, that would be a decrease from the $687 iPhone ASP seen in the prior year's December quarter.

Milunovich arrived at his estimate after CIRP found that 67 percent of December U.S. iPhone sales were Apple's latest flagship iPhone 6s and iPhone 6s Plus models. That's a decrease from the December 2014 quarter, when 75 percent of customers were buying the then-flagship iPhone 6 and iPhone 6 Plus.

The CIRP data suggests that iPhone demand itself has not slowed, but the mix of models appealing to customers has changed. If Apple did reach UBS's 75-million-unit prediction, it would eke past the 74.5 million units Apple shipped in the same quarter a year ago, setting a new all-time record.

Milunovich doesn't think Apple's December 2015 quarter will help the stock in the short-term. But he's also convinced that investors are simply too bearish on Apple's longer-term prospects.

"Consequently, we are inclined to take our short-term lumps and maintain the Buy rating given a solid franchise," he wrote, maintaining a 12-month price target of $130.
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Comments

  • Reply 1 of 33
    lkrupplkrupp Posts: 7,072member
    Unfortunately these results will now mean nothing in terms of AAPL. Analysts are worried about the upcoming next quarter in which they predict doom and gloom for iPhone sales. Supplier checks prove it don’t you know.
  • Reply 2 of 33
    jonljonl Posts: 210member
    If they are right, iPhone revenues will be down YoY, perhaps more than the lower ASPs indicate due to possibly lower margins on the older phones. The unfavorable mix would explain some of Cirrus's miss, as they were no doubt expecting to benefit more from the additional amp they added in the iPhones 6s. Though Skyworks hasn't warned, this will likely affect them a little, too, as they were said to have added content in the new phones.
  • Reply 3 of 33

    "Citing the latest data from Consumer Intelligence Research Partners, UBS analyst Steven Milunovich.."

    Is using Milunovich and 'Intelligence' in the same sentence a 'contradiction', 'oxymoron' or just a joke ?
    He is no friend of AAPL. He is more wrong than right and his AAPL targets have more ups and downs than a yo-yo.

    jbdragonrogifan_oldcali
  • Reply 4 of 33
    trumptmantrumptman Posts: 16,455member
    Could it really be that Apple is doing anything wrong?

    I think people aren't worried about how Apple is performing. I think people are questioning how much profit can be made in a market when the world is likely going to be experiencing a very strong economic downturn. The indicators are there across several markets. For Apple to take 90+% of all the profits in a market, there has to be a healthy market period. China is sick and the world is catching the cold.
    delreyjones
  • Reply 5 of 33
    rwesrwes Posts: 165member
    sog35 said:
    lkrupp said:
    Unfortunately these results will now mean nothing in terms of AAPL. Analysts are worried about the upcoming next quarter in which they predict doom and gloom for iPhone sales. Supplier checks prove it don’t you know.
    The same crap.
    Different quarter.

    This is why Apple needs to refute supply chain bullshit when its first reported.
    IMO, Apple would be at $110-$115 right now if Cook refuted the supply chain rumors in early December.
    It would be still down 15% from its highs because of the broad market decline but no way would it be down 30% like it is now.

    This is all about controlling the narrative. When the first supply chain rumors began in early December, Cook could have simply tweeted this to kill of these rumors:

    "We are on pace for our best holiday quarter EVER!"
    "Remember supply chain checks are inconclusive at best and misleading at worst."
    "Remember those supply chain rumors in 2012? 2013? 2014? How did that work out?"
    Or simply say nothing, and buyback more of the company at a lower cost? And sell, obviously, when higher, if/when those relying on supply chain checks are proven wrong?
    jbdragondelreyjonescali
  • Reply 6 of 33
    sog35 said:
    lkrupp said:
    Unfortunately these results will now mean nothing in terms of AAPL. Analysts are worried about the upcoming next quarter in which they predict doom and gloom for iPhone sales. Supplier checks prove it don’t you know.
    The same crap.
    Different quarter.

    This is why Apple needs to refute supply chain bullshit when its first reported.
    IMO, Apple would be at $110-$115 right now if Cook refuted the supply chain rumors in early December.
    It would be still down 15% from its highs because of the broad market decline but no way would it be down 30% like it is now.

    This is all about controlling the narrative. When the first supply chain rumors began in early December, Cook could have simply tweeted this to kill of these rumors:

    "We are on pace for our best holiday quarter EVER!"
    "Remember supply chain checks are inconclusive at best and misleading at worst."
    "Remember those supply chain rumors in 2012? 2013? 2014? How did that work out?"
    Just for future reference, will you be posting this same bs every time an article like this appears?
    nolamacguyronn
  • Reply 7 of 33
    lwiolwio Posts: 87member
    That's around $49,650,000,000 when looked at it this way. 
  • Reply 8 of 33
    jonljonl Posts: 210member
    sog35 said:
    The same crap.
    Different quarter.

    This is why Apple needs to refute supply chain bullshit when its first reported.
    IMO, Apple would be at $110-$115 right now if Cook refuted the supply chain rumors in early December.
    It would be still down 15% from its highs because of the broad market decline but no way would it be down 30% like it is now.

    This is all about controlling the narrative. When the first supply chain rumors began in early December, Cook could have simply tweeted this to kill of these rumors:

    "We are on pace for our best holiday quarter EVER!"
    "Remember supply chain checks are inconclusive at best and misleading at worst."
    "Remember those supply chain rumors in 2012? 2013? 2014? How did that work out?"
    Just for future reference, will you be posting this same bs every time an article like this appears?
    Not sure if serious.
  • Reply 9 of 33
    iphone 6 (16gb) sells on the apple store for $550 but the 64gb version sells for $650.  The 6+ sells for $650 and $750. It's not clear that selling year old 6 and 6+ phones will appreciably lower ASP.  The average of these 4 phones is $650.  It can't hurt that the year old phones now have two sizes and the larger size has a price that is approximately equal to the ASP.  
  • Reply 10 of 33
    I wonder if sog thinks Tim Cook should have gotten out in front of these supply chain rumors to protect the stock price, and if he thinks Tim Cook is a terrible CEO.
    jonldelreyjonesmontrosemacsradarthekatnolamacguylukeironn
  • Reply 11 of 33
    jbdragonjbdragon Posts: 2,116member
    sog35 said:
    Who cares.

    Wall Street has been constantly begging Apple to sell lower priced phones to get more market share.
    And now that Apple sales more phones at a cheaper price they think that's bad?

    What this dope does not realize is the pricing of the one year old 6+ and the expensive 6s+ make up for this.

    Some of these people are really clueless! What does market share get you? Apple is making around 94% of the profits currently on Smartphones selling to only about 20% of the market. All those millions of Android phones sold is getting these company's what? Samesung's profits are down, others are breaking even and the rest are losing money!!! Tell me, because I don't understand. How can selling a ZILLION of anything and breaking even or even losing money be BETTER then the other guy selling a fraction of the same type of thing, making most of the profit and not having to work as hard? When I mean work as hard, Well would you rather Sell a Zillion Android phones and break even or 1 iPhone and make a $50 profit? Or 10 Zillion Android phones to 10 iPhones. Still make nothing, or make $500? That's pretty much what's happening. There is no money to be made selling millions of cheap phones!!! That's the only way to grow marketshare in any real HUGE way that they would like. I just don't see how that helps Apple. It's like they care about bigger numbers except profit. Must be why they like Amazon and Google so much.
    latifbp
  • Reply 12 of 33
    SoliSoli Posts: 8,814member
    I'm not sure if the accounting methods have changed, but since I decided to use Apple's new iPhone Upgrade Program I opted for the 128GB iPhone 6S Plus this time around to see if the extra space would end up being useful, especially after the move to 12Mpx and 4K video. I haven't bought Apple's highest capacity or most expensive iPhone since 16GB and 32GB were the maximum capacities available. So, if my story is common enough, we may see a higher ASP than previous quarters.
    radarthekat
  • Reply 13 of 33
    Who is Consumer Intelligence Research Partners and why should we assume their research is accurate.
    cali
  • Reply 14 of 33
    Who is Consumer Intelligence Research Partners and why should we assume their research is accurate.
    They do research on intelligent consumers, so they mostly talk to iPhone users. I am not sure if this is accurate.
  • Reply 15 of 33
    mac_128mac_128 Posts: 3,429member
    aspenboy1 said:
    iphone 6 (16gb) sells on the apple store for $550 but the 64gb version sells for $650.  The 6+ sells for $650 and $750. It's not clear that selling year old 6 and 6+ phones will appreciably lower ASP.  The average of these 4 phones is $650.  It can't hurt that the year old phones now have two sizes and the larger size has a price that is approximately equal to the ASP.  
    It would be interesting to find out how many of those phones were the 5S, driven by those who need to upgrade their older iPhones, but chose size over features.

    This also underscores the importance of not pricing the new 4" at the low end, potentially cannibalizing premium sales from customers who want a smaller iPhone, but are otherwise willing to pay much more than the entry level price.
  • Reply 16 of 33
    mjtomlinmjtomlin Posts: 1,855member
    jonl said:
    If they are right, iPhone revenues will be down YoY, perhaps more than the lower ASPs indicate due to possibly lower margins on the older phones. The unfavorable mix would explain some of Cirrus's miss, as they were no doubt expecting to benefit more from the additional amp they added in the iPhones 6s. Though Skyworks hasn't warned, this will likely affect them a little, too, as they were said to have added content in the new phones.

    I don't think Apple is too worried. Regardless of iPhone sales, Apple is going to have another record quarter; WATCH, iPad Pro, iPod Touch, TV. The first is a brand new product line making its holiday debut. The second is a new iPad model that fills a niche, and the last two haven't seen a major update in years.
    delreyjones
  • Reply 17 of 33
    focherfocher Posts: 640member
    sog35 said:
    The same crap.
    Different quarter.

    This is why Apple needs to refute supply chain bullshit when its first reported.
    IMO, Apple would be at $110-$115 right now if Cook refuted the supply chain rumors in early December.
    It would be still down 15% from its highs because of the broad market decline but no way would it be down 30% like it is now.

    This is all about controlling the narrative. When the first supply chain rumors began in early December, Cook could have simply tweeted this to kill of these rumors:

    "We are on pace for our best holiday quarter EVER!"
    "Remember supply chain checks are inconclusive at best and misleading at worst."
    "Remember those supply chain rumors in 2012? 2013? 2014? How did that work out?"
    Just for future reference, will you be posting this same bs every time an article like this appears?
    Is that one of those rhetorical questions?
    singularity
  • Reply 18 of 33
    sricesrice Posts: 114member
    Q4-15 ER Tim Cook: "We believe that iPhone will grow in Q1.."

    Milunovich: "Based on our proprietary research we think Apple will sell more iPhones YoY ..."

    Fscking genius there buddy.
    edited January 2016 radarthekat
  • Reply 19 of 33
    trumptmantrumptman Posts: 16,455member
    sog35 said:

    trumptman said:
    Could it really be that Apple is doing anything wrong?

    I think people aren't worried about how Apple is performing. I think people are questioning how much profit can be made in a market when the world is likely going to be experiencing a very strong economic downturn. The indicators are there across several markets. For Apple to take 90+% of all the profits in a market, there has to be a healthy market period. China is sick and the world is catching the cold.
    The world went through a strong economic downturn in 2000, 2002, and 2008. 

    Yet Apple profits and revenue kept growing. Smartphones are a necessity in modern life. People won't stop buying smartphones.
    What about the institutions and investors that can no longer afford to have hold assets like Apple stock because their own financial situation is so bad? Smartphones might be a necessity. Owning Apple stock isn't a necessity. I'm just saying the issue doesn't have to be Apple like some people are postulating. The issue can be the companies that supply Apple can't afford their own R&D. The market overall can be shrinking and Apple could grab 100% of the profits in that shrinking market overall. Banks and institutions might have to liquidate their Apple holdings due to other underperforming assets forcing them to sell and have liquidity on hand.

    Having the best boat in the harbor doesn't matter when a Tsunami is coming.
  • Reply 20 of 33
    same analyst predicted 69.3m iPhones last year, and apple did 74.5mm...nuff said
    srice
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