Piper: over half million "missing" iPhones likely in channel

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Comments

  • Reply 21 of 67
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by RonAnnArbor View Post


    This is so ridiculous -- do these people NEVER travel?? I would bet almost all of the "missing" iPhones are in daily use across the world -- the last couple months I have been in Spain, Italy, and all over Canada and there are iPhones absolutely everywhere -- people use them in all the wireless cafes and you see them just everywhere. This entire "opinion" is just a sham to cover up the million or so unlocked iPHones out there.



    From Hong Kong to Madrid, there are hundreds of thousands of iphones --- sitting on the shelves of some cell phone stores --- those are technically "unsold" yet. It's inventory of the grey market.
  • Reply 22 of 67
    tbagginstbaggins Posts: 2,306member
    Quote:
    Originally Posted by samab View Post


    That's why Apple used the word "shipped" in their SEC filings.



    Any first year accountancy student would ignore Steve Jobs' Keynote speech and go directly to the filings.





    Yah. I've noticed that a lot of the news coverage has shifted from saying Apple "sold" x amount of phones to Apple "shipped" x amount of phones now. \



    .
  • Reply 23 of 67
    Do analysts live in the real world of 2008?

    Do they really think that what is sold in the US stays in the US?



    It looks a bit ridiculous to read that these iPhones are described as "missing" in the first place.



    Even in Steve Jobs' keynote a year ago he described it as the best iPod yet. That would sell tens of thousands right there.
  • Reply 24 of 67
    asdasdasdasd Posts: 5,285member
    Quote:

    Yah. I've noticed that a lot of the news coverage has shifted from saying Apple "sold" x amount of phones to Apple "shipped" x amount of phones now.



    Not true:this is the actual release:



    Apple shipped 2,319,000 Macintosh® computers, representing 44 percent unit growth and 47 percent revenue growth over the year-ago quarter. The Company sold 22,121,000 iPods during the quarter, representing five percent unit growth and 17 percent revenue growth over the year-ago quarter. Quarterly iPhone(TM) sales were 2,315,000.



    The Macs were shipped, everything else sold.
  • Reply 25 of 67
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by asdasd View Post


    Not true:this is the actual release:



    Apple shipped 2,319,000 Macintosh® computers, representing 44 percent unit growth and 47 percent revenue growth over the year-ago quarter. The Company sold 22,121,000 iPods during the quarter, representing five percent unit growth and 17 percent revenue growth over the year-ago quarter. Quarterly iPhone(TM) sales were 2,315,000.



    The Macs were shipped, everything else sold.



    Read the 10K SEC filing (page 38):



    "Revenue Recognition



    The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped, and title and risk of loss have been transferred. For most of the Company?s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit. If at the outset of an arrangement the Company determines the arrangement fee is not, or is presumed not to be, fixed or determinable, revenue is deferred and subsequently recognized as amounts become due and payable and all other criteria for revenue recognition have been met."



    http://media.corporate-ir.net/media_...APL_10K_07.pdf



    All numbers in Apple's SEC filings are SHIPPING numbers.
  • Reply 26 of 67
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by valanchan View Post


    Do analysts live in the real world of 2008?

    Do they really think that what is sold in the US stays in the US?



    It looks a bit ridiculous to read that these iPhones are described as "missing" in the first place.



    Even in Steve Jobs' keynote a year ago he described it as the best iPod yet. That would sell tens of thousands right there.



    Attention grabbing headlines make analysts more famous --- which is why every fanboi only knows 1 analyst, Munster, because he makes the most attention grabbing headlines.



    There are a lot of categories in which the "missing" iphones can go --- iphones sitting on the shelves of some Hong Kong or Madrid or Moscow or Toronto cell phone store haven't been sold to the consumer yet. They are the grey market's inventory.
  • Reply 27 of 67
    asdasdasdasd Posts: 5,285member
    Quote:

    All numbers in Apple's SEC filings are SHIPPING numbers.



    Clearly the shipping in the SEC filing refers to items shipped to a customer, big or small, who is the final customer. Hence the reference to online sales. A product in the channel is clearly in the channel, not sold or shipped to the final customer.
  • Reply 28 of 67
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by asdasd View Post


    Clearly the shipping in the SEC filing refers to items shipped to a customer, big or small, who is the final customer. Hence the reference to online sales. A product in the channel is clearly in the channel, not sold or shipped to the final customer.



    Customers don't mean the end-user.
  • Reply 29 of 67
    tbagginstbaggins Posts: 2,306member
    Quote:
    Originally Posted by samab View Post


    Read the 10K SEC filing (page 38):



    "Revenue Recognition



    The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped, and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the Company defers revenue until the customer receives the product because the Company retains a portion of the risk of loss on these sales during transit. If at the outset of an arrangement the Company determines the arrangement fee is not, or is presumed not to be, fixed or determinable, revenue is deferred and subsequently recognized as amounts become due and payable and all other criteria for revenue recognition have been met."



    http://media.corporate-ir.net/media_...APL_10K_07.pdf



    All numbers in Apple's SEC filings are SHIPPING numbers.









    Yup. And some of the media seems to be picking up on that. For example:





    "In the 2007 fourth quarter, Apple shipped 2.3 million iPhones."



    http://biz.yahoo.com/ts/080125/10400451.html?.v=1





    Oh, and here's an interesting excerpt from back in September on the issue:





    One source of confusion surrounding the iPhone and its sales could lie in how the numbers are calculated. Apple can count iPhones shipped to AT&T stores as sales, even before they have made their way into consumers' hands. Estimates vary depending on what point in the process the tally is made.



    Earlier this summer, AT&T revealed that it activated far fewer iPhones than were sold by Apple, and one of the reasons given for that gap was that a large number of iPhones may have been in transit as the quarter closed on the night of 30 June.




    http://news.zdnet.co.uk/communicatio...9289118,00.htm







    So, apparently, not a new problem.





    .
  • Reply 30 of 67
    asdasdasdasd Posts: 5,285member
    It clearly does in the case of Educational or online customer. Apple distinguishes between inventory in the Channel, and sales.
  • Reply 31 of 67
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by asdasd View Post


    It clearly does in the case of Educational or online customer. Apple distinguishes between inventory in the Channel, and sales.



    It doesn't say that Apple distinguishes at all. It merely stated that a portion of the revenue is not recognized immediately. It is only because they fear there is a loss DURING transit. These products were NEVER in the channel in the first place.



    Does Apple think that the iphones are going to be lost in transit when they are shipping it to the carriers?
  • Reply 32 of 67
    asdasdasdasd Posts: 5,285member
    Quote:

    Does Apple think that the iphones are going to be lost in transit when they are shipping it to the carriers?



    No becuase that transit is not a sale, it doenst matter. What do think happens to stock already in channel when prices drop ( like the AppleTV) - should Apple not take, and declare, a charge the next quarter since it has already marked these items - according to you - as sold?



    Have they mentioned that there is to be a charge next quarter?
  • Reply 33 of 67
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by hongkongmarc View Post


    I live in Hong Kong and I see iPhones all over the place even though they're not 'officially' available yet...and they sell for about $US600



    Do you get enough of a look to know they aren't the copies / knock-offs? I suppose for that price for sale, they should be the real thing, but if you see people carrying them, do you get enough of a look to see it's real?
  • Reply 34 of 67
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by asdasd View Post


    No becuase that transit is not a sale, it doenst matter. What do think happens to stock already in channel when prices drop ( like the AppleTV) - should Apple not take, and declare, a charge the next quarter since it has already marked these items - according to you - as sold?



    Have they mentioned that there is to be a charge next quarter?



    It is considered deferred revenue --- during transit.



    The iphone "rebate" is only recognized when the customer redeems it and would be charged back on a cost-to-cost basis of the redeemed item.



    http://seekingalpha.com/article/5084...nscript?page=4



    But they don't change the 'UNITS" in shipment. They change the revenue and cost column.
  • Reply 35 of 67
    asdasdasdasd Posts: 5,285member
    You may have deliberately misread me.



    I was talking about the price reduction on the AppleTV, not the price reduction on the iPhone which we know Apple took a charge for ( over two quarters I think). According to your theory there is no difference between items in channel and items sold to final customers, in either case the item is marked as "sold" and revenue is accounted for. Therefore an immediate reduction in the Apple Tv price would be a charge against APple in the next quarter from retailers who would have - according to you - have already paid for it ( or Apple in any case would have accounted for the revenue in the previous quarter).



    If there is no distinction between sold and In Channel then a price reduction of channel inventory has to accrue a charge to the company since it has already been marked as revenue. I dont see that happening.
  • Reply 36 of 67
    nvidia2008nvidia2008 Posts: 9,262member
    Looks like global unlocked (or grey market inventory as you call it, good term), iPhones so far maybe in excess of 1 million. At my local IT "centre" a dude (among many, many shops) tried to sell me one for about equivalent of USD $900.
  • Reply 37 of 67
    ..The end result: there are likely only several hundred thousand units unaccounted for ..



    with a global market in every thing else, it is not possible to restrict sales arbitrarily.



    the grey market exists becasue of the price fixxing that exists between countries.

    it is there for every product-why would iphone be an exception??



    here in australia iphones are avalable from fly-by-night shopfront stores and online for $600AUD

    delivered in a week..no warranty



    but just swap in a SIM from local telco and it works!!



    those that need be the first with the latest, have a few options to get one without going to hongkong.



    seems the grey market in hongkong gets their supplies direct from AT&T...big shipping boxes 'full' of iphones direct from US



    so it is no surprise to those that know



    just a surprise the free market analysts know so little about the free market!!



    or not?

    given the notion of a free press, you only 'know' what you are 'told'



    which the US has in abundance...

    i'll leave discussion of US public knowledge and manipulation of markets by press release to anothe time and place. insider trading may be illegal, but that only matter sif yoiu are caught!



    similar to supplying the grey market i suppose
  • Reply 38 of 67
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by nvidia2008 View Post


    Looks like global unlocked (or grey market inventory as you call it, good term), iPhones so far maybe in excess of 1 million. At my local IT "centre" a dude (among many, many shops) tried to sell me one for about equivalent of USD $900.



    "gray market" exactly the term to use. It's been around for some time. I have no idea how long.
  • Reply 39 of 67
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by JeffDM View Post


    "gray market" exactly the term to use. It's been around for some time. I have no idea how long.



    It's not the "grey market" part of it that is important. It is the "inventory" part that is important.



    Even Wall Street analysts don't break this important part down in the iphone equation.



    There are probably hundreds of thousands of iphones that have been bought by grey market resellers all over the world. But they are just sitting on their shelves in their stores. It's not technically sold yet.
  • Reply 40 of 67
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by asdasd View Post


    You may have deliberately misread me.



    I was talking about the price reduction on the AppleTV, not the price reduction on the iPhone which we know Apple took a charge for ( over two quarters I think). According to your theory there is no difference between items in channel and items sold to final customers, in either case the item is marked as "sold" and revenue is accounted for. Therefore an immediate reduction in the Apple Tv price would be a charge against APple in the next quarter from retailers who would have - according to you - have already paid for it ( or Apple in any case would have accounted for the revenue in the previous quarter).



    If there is no distinction between sold and In Channel then a price reduction of channel inventory has to accrue a charge to the company since it has already been marked as revenue. I dont see that happening.



    Channel retailers don't pay full price for the AppleTV --- they pay a much lower price than the sticker price. Authorized dealers also have long standing contractual relationships spelling out how to deal with MSRP price cuts and their dealer costs.



    It's the consumer electronic business --- price drops are regular and steady. You don't see every company from Sony to Samsung to Microsoft --- taking charges every quarter.



    Most companies list their ASP --- average selling price of a product. For Apple, it will say that they ship x million units for a total revenue of $y for an average selling price of $z.
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