UBS estimates 42.5M iPhones to be sold worldwide in holiday quarter
Investment bank UBS on Friday estimated that sales of Apple's iPhone will top 42.5M units worldwide, boosted by international iPhone 4S launches.
In a note issued to investors, analyst Maynard Um calls the firm's CY4Q forecast of 28 million worldwide iPhone sales conservative, estimating that upcoming international launches of the iPhone 4S could aid in more than doubling last quarter's 17 million sales.
Um notes, however, that international adoption of Apple's newest handset could be slow when compared to the U.S. given that Siri, the 4S-exclusive voice-recognition feature, only supports English, French and German. Despite the software's current limitation, the analyst believes the initial 28 million unit estimate to be conservative.
In CY3Q the U.S./international iPhone sales split was roughly 27.5% and 72.5% respectively. Um expects 11.7 million iPhones to be sold domestically in the upcoming quarter, and calculates that a split similar to last quarter's would imply about 42.5 million worldwide sales.
"While the timing of the 70 (of 105) country launches could have some impact on sales ahead of the launch, the split, and hence, our estimates look conservative," Um said.
The analyst writes that if Apple is able to manufacture and sell the estimated 42.5 million units, earnings per share of the company's stock would drive an incremental $3.09 to the estimated $9.47 for the December quarter. This equates to about $0.24 EPS for every 1 million units sold.
In their recent FY4Q earnings reports, both AT&T and Verizon corroborated Apple's claim that anticipation of the the iPhone 4S release slowed sales, causing the company to miss analysts' expectations for the last quarter of the 2011 fiscal year. However, given the new handset's record-breaking U.S rollout, incremental international launches and the addition of new partners like Sprint and regional carrier C-Spire, Um gives Apple a 12 month buy rating with a price target of $510.
In a note issued to investors, analyst Maynard Um calls the firm's CY4Q forecast of 28 million worldwide iPhone sales conservative, estimating that upcoming international launches of the iPhone 4S could aid in more than doubling last quarter's 17 million sales.
Um notes, however, that international adoption of Apple's newest handset could be slow when compared to the U.S. given that Siri, the 4S-exclusive voice-recognition feature, only supports English, French and German. Despite the software's current limitation, the analyst believes the initial 28 million unit estimate to be conservative.
In CY3Q the U.S./international iPhone sales split was roughly 27.5% and 72.5% respectively. Um expects 11.7 million iPhones to be sold domestically in the upcoming quarter, and calculates that a split similar to last quarter's would imply about 42.5 million worldwide sales.
"While the timing of the 70 (of 105) country launches could have some impact on sales ahead of the launch, the split, and hence, our estimates look conservative," Um said.
The analyst writes that if Apple is able to manufacture and sell the estimated 42.5 million units, earnings per share of the company's stock would drive an incremental $3.09 to the estimated $9.47 for the December quarter. This equates to about $0.24 EPS for every 1 million units sold.
In their recent FY4Q earnings reports, both AT&T and Verizon corroborated Apple's claim that anticipation of the the iPhone 4S release slowed sales, causing the company to miss analysts' expectations for the last quarter of the 2011 fiscal year. However, given the new handset's record-breaking U.S rollout, incremental international launches and the addition of new partners like Sprint and regional carrier C-Spire, Um gives Apple a 12 month buy rating with a price target of $510.
Comments
I am one of those sales, I just hope Apple doesn't take get the wrong message from those high numbers and think we are all happy with the smallish display. I really wanted at least a 4" display and 4.3" would be even better.
The problem with large displays, combined with a case, is that it becomes nearly impossible to use one-handed, unless your thumb is freakishly long. I suppose this is, in part, why they added Siri!
I would like to see this guy's financial model that spits out $9.47/Sh on 42.5M iPhones. My model, which is pretty good puts earnings at nearly $15/sh if they sold that many iPhones.
Analysts pulling ridiculous numbers out of their anal regions and creating a frenzy of uninformed people. Then, when Apple fails to meet their absurd figures, we'll get another round of "Apple misses targets" garbage - even if Apple is 20% above their guidance.
What they need to do is license these idiots. And every time they are significantly off on their projections, they get a few points. Enough points, and they lose their analyst license. It would certainly help to get rid of the insanity.
I am one of those sales, I just hope Apple doesn't take get the wrong message from those high numbers and think we are all happy with the smallish display. I really wanted at least a 4" display and 4.3" would be even better.
Are you sure you want an iPhone?
They know this is coming and want a high pay day when it arrives so drive that stock down and get on it when it rides to the top.
Here we go again.
Analysts pulling ridiculous numbers out of their anal regions and creating a frenzy of uninformed people. Then, when Apple fails to meet their absurd figures, we'll get another round of "Apple misses targets" garbage - even if Apple is 20% above their guidance.
What they need to do is license these idiots. And every time they are significantly off on their projections, they get a few points. Enough points, and they lose their analyst license. It would certainly help to get rid of the insanity.
... and now, if Apple "only" sells 30 million the headlines will say, "Slowing iPhone Sales A Problem for Apple".
Here we go again.
Analysts pulling ridiculous numbers out of their anal regions and creating a frenzy of uninformed people. Then, when Apple fails to meet their absurd figures, we'll get another round of "Apple misses targets" garbage - even if Apple is 20% above their guidance.
What they need to do is license these idiots. And every time they are significantly off on their projections, they get a few points. Enough points, and they lose their analyst license. It would certainly help to get rid of the insanity.
I agree 100%. This guy needs to be slapped in the mouth. What an @$$!!*(=!!!!
I'd love to see Oppenheimer grow a set and rail these analysts back instead of joyously exclaiming what an "awesome " "best ever" qtr they had and gush about it.
take these analysts on the earnings call to task. personally ream their records. WTF can the analysts do but get lambasted? they can't black ball apple more than they do with their lazy incorrect manipulation saturated analysis... which has been going on for years. Definitely, Tim cook should also put in his input. He seems like the kind of guy who could waste them in a tit for tat.
But, until apple fights this shit back- it's going to always produce a new game after apple works hard to put it to rest. Rinse repeat.
Here we go again.
Analysts pulling ridiculous numbers out of their anal regions and creating a frenzy of uninformed people. Then, when Apple fails to meet their absurd figures, we'll get another round of "Apple misses targets" garbage - even if Apple is 20% above their guidance.
What they need to do is license these idiots. And every time they are significantly off on their projections, they get a few points. Enough points, and they lose their analyst license. It would certainly help to get rid of the insanity.
So, is 42.5 million iPhones the new expectation? If Apple doesn't reach that number the stock will tank? I'm only saying. Apple didn't set this figure as the guidance but the analyst can whether it's even possible to build that many iPhones in the quarter. This is just total BS that Apple shareholders have to put up with.
People talk about how great Apple is and how much money they're making, but seriously, over the past 52 weeks, both IBM and Amazon shares are outperforming Apple shares. Amazon is making Apple stock look positively crappy by comparison. I don't quite understand how, but it's true. If someone would care to explain how, I'd love to hear it.
This is the third freaking time that Apple has gotten over $400 and then taken an almost $40 drop each time.
Buy on the rumor, sell on the news.
Yes, there are risks. The big one is that the US, EU and Japanese debts are one big Ponzi scheme. The competition of Android is another... however, Apple now has a well integrated product like with the iPhone, iPad, Mac, AppleTV, and even the iPod touch... all tied to iCloud. My system runs very smooth and is relatively secure. Even the Mac is gaining market share.
I'd be surprised if they could make that many.
To double production, Apple would have to plan long advance... that means stocking up on the supply chain with everything from the case, display, components, etc. More difficult would be to get assembly plants to ramp up to double the capacity.
However, the business risks at this stage are too hi for the company to risk a huge build up in inventory... unless they are willing to sign up China Mobile, China Unicom, China Telecom in a big way. I would say that China Mobile would be a challenge with their TD-SCDMA network.
Last quarter saw a slowdown due to the new iPhone rumors, so lets take the FQ3 as a baseline. They sold over 20m in that quarter.
This quarter
- it's the holiday quarter, which always handily beats the biggest quarter of the previous fiscal year
- They are adding a bunch of new carriers
- They are accelerating the iPhone 4S roll-out compared to last year
- They obviously have more inventory and production capacity this time, resulting in less sellout of the 4s, lower lead times for orders after the release and doubling of last years first weekend sales
- They lowered the price of the cheapest available iPhone and the 3Gs is already selling in record numbers according to AT&T
- They are clearing inventory of iPhone 4 16/32GB at reduced prices
- They are selling iPhones un-locked in more markets, which is important for prepaid customers, which make out almost half the market outside of the US
- Growth in Asia is accelerating at mind-blowing numbers
Take all that together and I can easily see 40m.
27 M iPhones at $700 = 18.9 B
15 M iPads at $600 = 9 B
5.5 M Macs at $1300 = 8.25 B
iTunes = 2 B
Software = 2 B (wild guess have never studied the Apple earnings in depth )
Total > $40 B.
Want to be as good as any analyst or blogger (indie)?
1. Make a spreasheet with the above data.
2. Adjust the unit sales based on your own feeling.
3. Adjust the ASPs (prices) to something closer to what is reported by Apple. As opposed to my guesses here.
4. Add a row to your spreadsheet for profits (use similar methods).
5. Update your spreadsheet quarterly.