Data suggests Apple has cruised past 10 million iPhone goal

Posted:
in iPhone edited January 2014
An effort on the part of members of Mac Observer?s AFB to track IMEI iPhone numbers has led two technology analysts to conclude that Apple has drastically surpassed analyst? Q4 iPhone sales estimates, and reached its goal of selling 10 million iPhones in 2008 three months early.



The consensus estimates for iPhone sales figures for Apple?s Q4 (calendar Q3) were calling for approximately 4 million units. It now appears that Apple has sold at least 7 to 7.5 million iPhones in Q4 -- nearly 80% above consensus. Apple has far surpassed even Gene Munster?s bullish estimates of 5 million iPhone sales in Q4 according to the data.



At MacWorld 2007, when Apple was trading at the same price it is today, Steve Jobs and Apple set a bold goal of selling 10 million iPhones in 2008. Despite Apple?s consistent reassurances of meeting its goal, bearish analysts repeatedly raised irrational concerns about whether Apple could reach such lofty sales figures. In January, Bernstein Research analyst Toni Sacconaghi, an analyst who rarely comments on Apple, started the ?missing iPhones controversy? which led to a herd of naive analysts to reduce their iPhone sales estimates to numbers that fell well below Apple?s 10 million iPhone goal for 2008. Sacconaghi forecasted that Apple would only sell 7.9 million iPhones in the period. This obviously put considerable pricing pressure on shares of Apple in February.



Kathryn Huberty of Morgan Stanley estimated that Apple would only sell 9.3 million iPhones for the year. Apple now appears to be on track to sell nearly double that number. Yet, Huberty and Sacconaghi weren't the only ones to grossly underestimate the company's iPhone performance. Keith Bachman of BMO Capital also jumped on bandwagon in February when he estimated that Apple would only sell 8.5 million iPhones in 2008. Scott Craig of Bank of America also maintained bearish iPhone estimates in February with an 8 million iPhone sales target. Several other analysts followed suit and are now likely to be proven wrong.



IMEI Number Tracking by Mac Observer?s AFB



An IMEI number or an International Mobile Equipment Identity number is a unique 15 digit code assigned to each individual iPhone found on the back of the box in which an iPhone is packaged. Within this 15 digit code are two 6-digit numerical sequences crucial to determining the number of iPhones being produced. One 6 digit number, known as the TAC, or Type Allocation Code, signifies a particular build or set of iPhones being manufactured. The second 6 digit number is unique to each individual iPhone produced in that particular series?so that 1 million iPhones can be registered to a specific TAC. In other words, one six digit code, known as the TAC, signifies a set of iPhones being produced whereas the other six digit code signifies each individual iPhone within the TAC set.



Investor Village's AAPL Sanity Board member 'howlongtoretire,' along with members at the Apple Finance Board at Mac Observer, have been collecting IMEI numbers [spreadsheet] from new 3G iPhones sold during the period, and have been maintaining a spreadsheet of iPhone IMEI data points along with the purchase date, model, and production week. By early September, Apple was on its eighth TAC, meaning that 8 million 3G iPhones had already been manufactured. The actual number of handsets sold versus manufactured depends on a variety of factors including the amount of inventory Apple carries in its retail chain, defects that were destroyed, defects that were sold and then exchanged, display models etc.



However, the latest IMEI data point collected by AFB was 9,190,680 -- an 8GB Black iPhone recorded as manufactured on September 29 and sold on October 5. This suggests that even if a whopping 1.5 million iPhones of the total IMEI registered devices are unsold as of today, an unlikely assumption, it would still put 3G iPhone sales at 7.6 million units and 2008 iPhone sales at over 10 million units. Coming into the quarter, Apple had already sold 2.42 million iPhones. Thus, 7.6 million 3G iPhones sold puts Apple above 10 million units for the year.



Net Applications OS Market Share:



The Net App OS share measurements based on web usage data lends further support to the IMEI tracking conclusions. In the weeks leading up to the 3G launch, iPhone OS share was rather consistent hovering at 16 bps. During this period, the population of iPhones remained static at 6 million units because inventory dried up weeks before. The share readings began to rise sharply subsequent to the 3G introduction. Due to the volatility and noise present in the data over the quarter, it?s not possible to make granular assessments. However, for the last few weeks of the September quarter, iPhone OS was averaging 34 bps. This suggests iPhone units increased by 6.75M. A small portion of legacy iPhones were replaced by 3G models resulting in those sales having no effect OS market share readings. Sales into the channel are not represented in the Net Applications measurement since the device is yet to reach the end-consumer. This data together with the IMEI Number Tracking by the AFB highly suggests that Apple more than likely sold at least 7 million iPhones in Q4 and that Apple has surpassed its 10 million iPhone target.



Disclosure: Both Andy Zaky and Turley Muller are Long Apple.
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Comments

  • Reply 1 of 67
    nvidia2008nvidia2008 Posts: 9,262member
    Great job Andy & Turley. Hope you both can hang around on this thread to answer any further questions we might have. Clearly, July-Aug-Sep was some crazy ass iPhone 3G selling around the world. Now we have some data. 10 million iPhone thingys before the holiday season.



    Another 10 million to go by the end of the year.
  • Reply 2 of 67
    nvidia2008nvidia2008 Posts: 9,262member
    Andy/others, if possible, what evidence can we show to strongly suggest that AAPL is trading at massive discounts right now at about $92+ pre-market opening?
  • Reply 3 of 67
    monstrositymonstrosity Posts: 2,190member
    Once again the naysayers are proved wrong. When will people learn!?
  • Reply 4 of 67
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by nvidia2008 View Post


    Clearly, July-Aug-Sep was some crazy ass iPhone 3G selling around the world.



    I was at a mall this weekend with an Apple Store inside. There was no longer a line for iPhones but there were people waiting around for them and most of the staff was helping people with buying iPhones. Some of them looked like entire families buying them. Too bad none of that will help the stock price.



    Quote:
    Originally Posted by nvidia2008 View Post


    Andy/others, if possible, what evidence can we show to strongly suggest that AAPL is trading at massive discounts right now at about $92+ pre-market opening?



    Crazy market! Even my blue chips are down quite a bit in re-market.
  • Reply 5 of 67
    If the estimate is correct, that would put Apple ahead of RIM globally in terms of number of phones sold in Q4. According to RIM's most recent earnings report, they have sold about 6.1 million phones globally.
  • Reply 6 of 67
    richlrichl Posts: 2,213member
    Basing sales estimates on IMEI numbers is a very dangerous game. There's too many factors which could skew the results.



    Let's wait for the official numbers as I'm sure they'll be good.
  • Reply 7 of 67
    nvidia2008nvidia2008 Posts: 9,262member
    Wow. Yahoo Finance now has real time quotes.
  • Reply 8 of 67
    doroteadorotea Posts: 323member
    Quote:
    Originally Posted by nvidia2008 View Post


    Andy/others, if possible, what evidence can we show to strongly suggest that AAPL is trading at massive discounts right now at about $92+ pre-market opening?





    Apple is trading at a lower price because the total market is going down. Doesn't take much to understand that. Look at the business/finance info before asking silly questions!!!
  • Reply 9 of 67
    nvidia2008nvidia2008 Posts: 9,262member
    Quote:
    Originally Posted by Dorotea View Post


    Apple is trading at a lower price because the total market is going down. Doesn't take much to understand that. Look at the business/finance info before asking silly questions!!!



    Umm... It's pretty freakin' low, my dear. My question would be, why $90? Why not $100? Why not $70 to $80. That's what analysts and people that "look at the business/finance info" should be able to answer.



    To say "Oh because the whole market is down!" is ludicrous. That implies extreme irrationality. I think there is irrational behaviour, but not so extreme as to be "OMFG SELL EVERYTHING"... There must be more signal in the noise.



    I wasn't in a freakin' cave the past few months, BTW. Of course I've looked at the news. We know how rubbish news is, Andy Zaky has made some insightful comments before, so let him and others make it, if you have nothing substantial to contribute.
  • Reply 10 of 67
    boogabooga Posts: 1,077member
    Quote:
    Originally Posted by RichL View Post


    Basing sales estimates on IMEI numbers is a very dangerous game. There's too many factors which could skew the results.



    Let's wait for the official numbers as I'm sure they'll be good.



    Additionally, comparing iPhone OS 1.x web usage numbers against users of iPhone OS 2.x is a little shaky. A lot of those third party apps basically contact web sites on the back end but make it a lot easier to use, thus higher numbers for the same handset.
  • Reply 11 of 67
    aaarrrggghaaarrrgggh Posts: 1,569member
    Wow.



    In a best case scenario, that would add another $0.10 to per share earnings for the quarter as well as the next seven. That's about 10% above expectations.



    When they release earnings, what could they possibly say that will push shares lower still?
  • Reply 12 of 67
    nvidia2008nvidia2008 Posts: 9,262member
    Quote:
    Originally Posted by aaarrrgggh View Post


    ...When they release earnings, what could they possibly say that will push shares lower still?



    That Apple went and built its own factory to make consumer electronics.
  • Reply 13 of 67
    nvidia2008nvidia2008 Posts: 9,262member
    Quote:
    Originally Posted by Dorotea View Post


    Apple is trading at a lower price because the total market is going down...



    The charts show that AAPL is being hammered far more in the past week than Nasdaq, DJ, SP500.
  • Reply 14 of 67
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by nvidia2008 View Post


    The charts show that AAPL is being hammered far more in the past week than Nasdaq, DJ, SP500.



    Typical market move for tech companies. They also rebound a lot faster, too.
  • Reply 15 of 67
    monstrositymonstrosity Posts: 2,190member
    Quote:
    Originally Posted by nvidia2008 View Post


    The charts show that AAPL is being hammered far more in the past week than Nasdaq, DJ, SP500.



    IMO its partly because there is currently oodles of bullshit reporting on Apple (not normally on appleinsider, thats why I come here).

    Almost everything I read is complete nonsense, written by people who are full of shit, who...



    a) Have no idea about Apples business model

    b) Will financially benefit by seeing Apple fail

    c) Are attention seeking morons looking for page hits



    And as there are many companies and individuals in Apples firing line, there are MANY people who wish to see apple fail.

    All those people who have spent the last 20 years trained up in microsoft (just as example), feel a little threatened right now no doubt.



    Almost everyone I speak to (who reads the nonsense) is currently brainwashed into thinking Apple is dead.

    No matter what I say to them, they believe what they have read over the information I give them, which I find annoying. Especially as I tipped many of them off at $10 a share when the same reporters/analysts were reporting apple as dead 10 years ago.



    They never learn!!!

    And it annoys the hell out of me.
  • Reply 16 of 67
    drjjonesdrjjones Posts: 162member
    Just wait for Halloween. 10 days after earnings report, AAPL will be up considerably and you will be alot happier.
  • Reply 17 of 67
    luisdiasluisdias Posts: 277member
    Quote:
    Originally Posted by nvidia2008 View Post


    To say "Oh because the whole market is down!" is ludicrous. That implies extreme irrationality. I think there is irrational behaviour, but not so extreme as to be "OMFG SELL EVERYTHING"... There must be more signal in the noise.



    So, the current panic in the house has nothing whatsoever to do with the recent drop of Apple's shares? I'll bite. So what's the fundamental base for this drop then? That Apple's share in laptops is surging like hell? That iPhones are selling like hell? Hmmm, that doesn't fit, now does it?



    The markets are acting extremely irrational these days. They fear that a deep recession will plunge Apple's core market, that people in a recession won't buy Apple's products. They take Apple as one of the most fragile companies out there if there's a recession, and people now are very weary of where they are going to put money. It's not that there is a lot of "sell", but I bet that there is too little of "buy".



    Now, if you believe otherwise, I think that it is a good time to buy Apple's shares. Perhaps wait a bit longer until they go deeply to the 60 dollar level. If you are also in fear, then sell. There's nothing better than time to tell us who's right or wrong, though.
  • Reply 18 of 67
    luisdiasluisdias Posts: 277member
    Quote:
    Originally Posted by monstrosity View Post


    IMO its partly because there is currently oodles of bullshit reporting on Apple (not normally on appleinsider, thats why I come here).

    Almost everything I read is complete nonsense, written by people who are full of shit, who...



    You forgot to mention the heart attack news about El Comandante. I'm sure some people sold their AAPL the moment they read those two words connected with Jobs.
  • Reply 19 of 67
    The market is down, yes...but haven't I been reading stories here on AI talking about how Apple is expected to grow despite the economic drag? So AAPL goes from $200 a few months ago down to $90...when they are pumping out ever-more Macs, iPhones, and iTunes?? Again, I'm not naive...I realize the whole market is down...but 55%???? Can we blame this on the "speculators" too???
  • Reply 20 of 67
    monstrositymonstrosity Posts: 2,190member
    Quote:
    Originally Posted by LuisDias View Post


    You forgot to mention the heart attack news about El Comandante. I'm sure some people sold their AAPL the moment they read those two words connected with Jobs.



    Indeed, but I felt that was covered under news reporters of type 'B' who "Will financially benefit by seeing Apple fail"



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