UBS says iPhone sales ahead of estimates, new iPods on the way

Posted:
in iPod + iTunes + AppleTV edited January 2014
Shares of Apple Inc. rose nearly 5 percent on Tuesday after an analyst for UBS Investment Research said checks indicate that the company will likely beat its stated sales goal of 730,000 iPhone units for the current quarter.



"Our checks and discussions with Apple and AT&T store representatives continue to indicate relatively solid demand for the iPhone despite a significant moderation in excitement and hype from the June 29th launch," analyst Ben Reitzes told clients in a research note Tuesday.



In addition to visiting and calling several Apple retail stores as part of his latest study, the analyst also surveyed 70 AT&T stores across the country to get a feel for iPhone demand, availability and problems customers may be having. He explained that polling AT&T stores is an essential measure in gauging the iPhone story since Apple stores could conceivably have more motivation to promote a pro-Apple bias.



"AT&T stores we spoke with indicated that sales of the iPhone remain relatively solid through mid-August," he wrote. "While demand has slowed from the initial launch as expected, the weighted average of iPhones sold per store per day in our survey was about 5."



Based on his findings, Reitzes said it's appropriate to assume that each of AT&T's 1800 nationwide retail stores are selling at least 3 iPhone handsets per day, which alone would equate to approximately 500,000 units over the course of the quarter or about 60 percent of his fiscal fourth quarter estimate of 800,000 units.



"Factoring in hundreds of thousands of iPhones sold through Apple stores and online via Apple.com, we still believe that our unit estimate is conservative," he told clients. "While Apple has not provided any information into expanded distribution of the iPhone beyond Apple and AT&T stores, we continue to believe Apple may expand distribution to include other retailers over time (Best Buy would make sense)."



In the coming weeks, the analyst also expects Apple to announce its European iPhone strategy, which will initially include just three European countries -- the UK, France and Germany. iPhone shipments for those countries should begin in the December quarter, he said, and expanded to other nations and parts of Asia in 2008.



"We believe that there is no technical barrier that prohibits Apple to sell the iPhone in China despite there being no iTunes store in the region (a user can use iTunes and activate the phone with an internet connection)," he wrote. "We believe new models for the iPhone will emerge next year, which could help sales incorporating a sleeker design at more attractive price points."



In his note to clients, the UBS analyst also said he expects Apple to refresh its iPod video and iPod nano lines sometime next month. Among the expected introductions are higher capacity iPod nanos at aggressive price points, as well as a flash based widescreen video iPod likely using multi-touch technology for less than $300.



"We believe this is an important launch in that it should re-stimulate iPod sales into the holiday season," he wrote. "In addition, we believe many consumers have been waiting for this upgrade to take place, especially in the video iPod products, as it has been about two years since that line has had a major upgrade."



Reitzes reiterated his Buy rating and $175 price target on shares of the Cupertino-based electronics maker but made no changes to his current estimates.



Apple investors reacted favorably to the comments, sending shares of the company up nearly 5 percent to $128.70 in early afternoon trading on the Nasdaq stock market.
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Comments

  • Reply 1 of 51
    Quote:

    In the coming weeks, the analyst also expects Apple to announce its European iPhone strategy, which will initially include just three European countries -- the UK, France and Germany. iPhone shipments for those countries should begin in the December quarter, he said, and expanded to other nations and parts of Asia in 2008.



    Canada?!



    Is Rogers being daft?
  • Reply 2 of 51
    Quote:
    Originally Posted by waytogobuddy View Post


    Canada?!



    Is Rogers being daft?



    Roger's has no clue what it's customers want, they never have. Our only hope is for the CRTC to open up competition to US/international carriers... too bad Virgin signed on the CDMA networks but Rogers screwed that up too.
  • Reply 3 of 51
    remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?



    now it looks like, hopefully, a million iphones sold by the end of the quarter.



    i dont know about anyone else but this seems like a big dissapointment to me...
  • Reply 4 of 51
    citycity Posts: 522member
    private
  • Reply 5 of 51
    grbgrb Posts: 7member
    Quote:
    Originally Posted by waytogobuddy View Post


    Canada?!



    Is Rogers being daft?



    Don't worry about it until European details are announced. If Canada isn't mentioned then, THEN you can start worrying
  • Reply 6 of 51
    mstonemstone Posts: 11,510member
    I thought this was an interesting bit of information found on Bloomberg.



    "IPhones are selling at a rate of about three per day at AT&T stores, compared with about five a day at Apple's outlets. AT&T is selling the device through about 1,800 company-owned locations, while Apple has about 150 U.S. stores."





    http://www.bloomberg.com/apps/news?p...d=a0eL9cCUQcQ4



    Sorry I just noticed it is the same quote as the AI article.



    m
  • Reply 7 of 51
    citycity Posts: 522member
    private
  • Reply 8 of 51
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by city View Post


    I will do the arithmatic. 5 X 150 = 750 f0r Apple and 3 X 1,800 = 5,400 for AT&T and 5,400 + 750 = 6,150 for Apple per day times 3o days is 184,500 and if I buy 1 that's 184,501 per 30 days



    What about sales at the Apple website?



    Still the numbers don't make sense to me either.
  • Reply 9 of 51
    melgrossmelgross Posts: 31,690member
    Quote:
    Originally Posted by madeincupertino View Post


    remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?



    now it looks like, hopefully, a million iphones sold by the end of the quarter.



    i dont know about anyone else but this seems like a big dissapointment to me...



    If you get too excited, and believe all of the hype from those who would have no way of knowing, because you WANT to believe the hype, then you will always be disappointed when reality sets in.
  • Reply 10 of 51
    physguyphysguy Posts: 915member
    Quote:
    Originally Posted by city View Post


    I will do the arithmatic. 5 X 150 = 750 f0r Apple and 3 X 1,800 = 5,400 for AT&T and 5,400 + 750 = 6,150 for Apple per day times 3o days is 184,500 and if I buy 1 that's 184,501 per 30 days



    184,500 x 3 = 553,500 per quarter. The math is fine.
  • Reply 11 of 51
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by physguy View Post


    184,500 x 3 = 553,500 per quarter. The math is fine.



    That's still almost 200,000 fewer units than Reitzes is predicting. Is this shortfall made up by online sales?
  • Reply 12 of 51
    Which is a long way from the burn rate of 800,000 per month needed to hit 10 million by the end of 2008.
  • Reply 13 of 51
    Quote:
    Originally Posted by madeincupertino View Post


    remember the iphone launch when some analysts were predicting 800,000 to 1 million iPhones sold over a long weekend?



    now it looks like, hopefully, a million iphones sold by the end of the quarter.



    i dont know about anyone else but this seems like a big dissapointment to me...



    It's not a disappointment, it was impossibly high expectations that seem to have come from nothing more than clueless "analysts" making a wild guess.



    When you compare the numbers to real world ones (actual sales numbers of other phones and ipods) and not numbers from someone's wild fantasy, the numbers have been very good.



    Seriously, isn't this pretty much the fastest selling phone of all time? That's a big disappointment?
  • Reply 14 of 51
    new ipods anyone?
  • Reply 15 of 51
    melgrossmelgross Posts: 31,690member
    Quote:
    Originally Posted by backtomac View Post


    That's still almost 200,000 fewer units than Reitzes is predicting. Is this shortfall made up by online sales?



    It sounds like that's what he said.
  • Reply 16 of 51
    melgrossmelgross Posts: 31,690member
    Quote:
    Originally Posted by Dave Marsh View Post


    Which is a long way from the burn rate of 800,000 per month needed to hit 10 million by the end of 2008.



    By then, there will be a much bigger population available to buy this, plus the fact that there will be some new models somewhere along the way in 2008.



    but, I don't see how you get 800,000. The number of 10 million includes the 3 million, or so (possibly more), that will be sold this year through the end of December, with the holiday season coming up next quarter.



    I get 583 thousand a month for 2008.
  • Reply 17 of 51
    Quote:
    Originally Posted by Dave Marsh View Post


    Which is a long way from the burn rate of 800,000 per month needed to hit 10 million by the end of 2008.



    But it's likely not going to sell at a constant rate. Apple is assuming that sales will increase as time goes on similar to what happened with the iPod. Which is probably likely, especially so if prices drop and new models are introduced in that timeframe.
  • Reply 18 of 51
    bageljoeybageljoey Posts: 1,755member
    Quote:
    Originally Posted by melgross View Post


    If you get too excited, and believe all of the hype from those who would have no way of knowing, because you WANT to believe the hype, then you will always be disappointed when reality sets in.



    Very succinctly put. This needs to be re-posted before and after every major Apple announcement.

    People seem so bummed out after every event, but when they look back, using hindsight, Apple is chugging along nicely.



    These numbers look good to me.
  • Reply 19 of 51
    Not sure about this math



    "Based on his findings, Reitzes said it's appropriate to assume that each of AT&T's 1800 nationwide retail stores are selling at least 3 iPhone handsets per day, which alone would equate to approximately 500,000 units over the course of the quarter or about 60 percent of his fiscal fourth quarter estimate of 800,000 units."



    If each AT&T store sells 3 phones a day and there are 1800 stores, that is 5,400 per day. assuming 6 days a week that is 32,400 units a week. So that would be 129,600 per month and 388,800 for the Quater just from AT&T stores. This does not count Apple stores which are likely to sell 20 units a day for small stores and around 100 per day for larger stores in major metro areas.



    That is a bunch of phones.
  • Reply 20 of 51
    bageljoeybageljoey Posts: 1,755member
    Quote:
    Originally Posted by backtomac View Post


    That's still almost 200,000 fewer units than Reitzes is predicting. Is this shortfall made up by online sales?



    I thought that the initial sales surge made up for the shortfall. Just because they ar selling at that rate now does not mean that the early July rate was the same...
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