Apple could sell up to 8M iPhone 5s and 5c units over launch weekend, analyst says
While many market watchers are concerned that Apple has not announced preorder numbers for the iPhone 5c and may face supply constraints with the iPhone 5s, one analyst believes launch weekend sales will blow past last year's record setting iPhone 5 performance.
According to KGI analyst Ming-Chi Kuo, Apple's silence may simply be a strategy to conceal the exact iPhone 5s and 5c sales breakdown from competitors, and does not necessarily mean preorders for the plastic shelled device are weak.
In fact, Kuo said in a note to investors on Wednesday that Apple will likely ship 6 to 8 million new iPhones over the devices' first weekend of sales. By comparison, Apple racked up 5 million sales when the iPhone 5 debuted last year. Earlier in the day, Piper Jaffray analyst Gene Munster forecast 5 to 6 million unit sales, a more conservative number based on the prior model's in-store launch sales.
Kuo believes Apple won't show its hand until the launch weekend is over, combining total iPhone 5s and 5c sales into one number. In 2012, the company used a similar tactic for the fourth-generation iPad and iPad mini.
Due to supply constraints, Kuo sees the iPhone 5s accounting for only 35 to 45 percent of sales, while the iPhone 5c will take the remaining 55 to 65 percent.
While the 5s can be considered Apple's next-generation model with high-end, upgraded components and a price to match, some expected the 5c to fill a lower-end market and were disappointed to see a relatively high price tag. Kuo posits that the iPhone 5c is not positioned to be Apple's "low-price" model, but is instead a life extender for the iPhone 5. He notes that, despite its new functionality, the iPhone 5s retains the same screen size as the iPhone 5c, which for many buyers is a major selling point. If the plastic model was priced too low, it could cannibalize sales of the high-price 5s.
Further, an unreasonably low priced iPhone 5c could limit Apple's pricing model for future products. Kuo points out that Apple can always cut the 5c's cost after initial demand has been satisfied, and may do so next year when the next iPhone is unveiled.
Adding another wrinkle to speculative iPhone demand is the possibility of China Mobile versions of the handsets, a much rumored device that has yet to be officially announced. Kuo believes the world's largest cellular provider will use high-end smartphones like the iPhone 5c to market its upcoming TDD-LTE network. Because service coverage will be limited at launch, the telecom may lean on the 5c to draw in customers, Kuo said.
In any case, Apple's newest iPhones go on sale this Friday at 8 a.m. locally, with an anticipated sales announcement coming next week.
According to KGI analyst Ming-Chi Kuo, Apple's silence may simply be a strategy to conceal the exact iPhone 5s and 5c sales breakdown from competitors, and does not necessarily mean preorders for the plastic shelled device are weak.
In fact, Kuo said in a note to investors on Wednesday that Apple will likely ship 6 to 8 million new iPhones over the devices' first weekend of sales. By comparison, Apple racked up 5 million sales when the iPhone 5 debuted last year. Earlier in the day, Piper Jaffray analyst Gene Munster forecast 5 to 6 million unit sales, a more conservative number based on the prior model's in-store launch sales.
Kuo believes Apple won't show its hand until the launch weekend is over, combining total iPhone 5s and 5c sales into one number. In 2012, the company used a similar tactic for the fourth-generation iPad and iPad mini.
Due to supply constraints, Kuo sees the iPhone 5s accounting for only 35 to 45 percent of sales, while the iPhone 5c will take the remaining 55 to 65 percent.
While the 5s can be considered Apple's next-generation model with high-end, upgraded components and a price to match, some expected the 5c to fill a lower-end market and were disappointed to see a relatively high price tag. Kuo posits that the iPhone 5c is not positioned to be Apple's "low-price" model, but is instead a life extender for the iPhone 5. He notes that, despite its new functionality, the iPhone 5s retains the same screen size as the iPhone 5c, which for many buyers is a major selling point. If the plastic model was priced too low, it could cannibalize sales of the high-price 5s.
Further, an unreasonably low priced iPhone 5c could limit Apple's pricing model for future products. Kuo points out that Apple can always cut the 5c's cost after initial demand has been satisfied, and may do so next year when the next iPhone is unveiled.
Adding another wrinkle to speculative iPhone demand is the possibility of China Mobile versions of the handsets, a much rumored device that has yet to be officially announced. Kuo believes the world's largest cellular provider will use high-end smartphones like the iPhone 5c to market its upcoming TDD-LTE network. Because service coverage will be limited at launch, the telecom may lean on the 5c to draw in customers, Kuo said.
In any case, Apple's newest iPhones go on sale this Friday at 8 a.m. locally, with an anticipated sales announcement coming next week.
Comments
I get it. Whatever a competitor analyst says, you just contradict, resulting in controversy, and people like that.
So, Kuo, buy or sell?
Wait, that's not what Gene said. And we trust Gene, right¿
I get it. Whatever a competitor analyst says, you just contradict, resulting in controversy, and people like that.
So, Kuo, buy or sell?
At least Kuo was spot on with basically all predictions for the iPhone 5c and 5s, Munster has barely be accurate about anything ever related to Apple. With sales estimates I still think they all just do a little rectal searching. Time will tell. With 50 or more "professionals" guessing someone is bound to fall backwards onto the right number.
I remember hearing that iWork will be free. Is that free only on iCloud.com or iPad too?
I think that's true of all new iOS devices, not existing ones. Correct me if I am wrong.
Kuo was freakishly accurate with the 5s, 5c, and 4S. NO ONE here believed his analysis of the 5c replacing the 5 in the lineup and the 4S living on, but lo and behold that's exactly what we saw.
I think Gene speculated that the iPhone 5 would live on and the 5c would replace the 4S?
Either way I think Kuo is on track with his guesstimate of 6-8 million phones for this weekend. Gene's 5-6 million was far too low of a guess considering the seeming pent up demand for new iPhones.
Very valid point. Plus other phrases should enter the lexicon, although these are all negative by contrast ... 'Oh you are totally zuned!', 'It's built like an android', 'as reliable as windows' and 'you heap of steaming ballmer' and 'as sincere as a gatorguy'.
I see on John Gruber's twitter feed that some analytics firm is reporting iOS 7 adoption at 25% already. Impressive if true. It takes Android years to get close to a number like that.
I don't know how many iPhones they will sell this weekend, but I wonder if they can deliver what they sell. I bought. 5c last Friday and my order still says "preparing for shipment," not "shipped." I haven't done a preorder like this, is that normal? Do they overnight them? Or is it one of those situations where the shipment arrives before the web site updates? Just curious.
The status will be updated. In fact, you should get email notification and a UPS or Fedex tracking # when it is shipped.
The phrase "sells like hotcakes" should be changed to "sells like iPhones."
Good point. In fact, have hot cakes ever sold even a million over any weekend? When is hot cakes 7.0 coming out?
LOL!
ROTF!
Also, "let met Cmd-Samsung / Cmd-V that"
Oh great so now we'll start seeing unrealistic predictions that Apple can never meet so come Monday Wall Street can scream that Apple is doomed!
Does Wall St. really scream that Apple is doomed? Some analysts are consistently negative. A few have even predicted the demise of either Cook or Apple. But there are also some positive ones, too. Why do you like to exaggerate the situation? Isn't that no better than what the worst analysts do?
I think that's true of all new iOS devices, not existing ones. Correct me if I am wrong.
That's right.
What's in my hand?
What's in your hand ... ? Hopefully hard evidence for AAPL to go up ...
The future!
Does it seem shady to anyone else? Is this an actual pattern?
I bought some more shares on Tuesday where I'm hoping to see a jump after this quarter's numbers are released...