Driven again by China, Apple's iPhone shipments expected to hit 51M for June quarter

Posted:
in AAPL Investors edited July 2015
Apple is poised to announce yet another record breaking quarter, the latest research from investment firm UBS suggests, with iPhone sales once again driven to new heights thanks largely to growth in China.




Using data from the UBS Evidence Lab iPhone Monitor, analyst Steven Milunovich on Thursday said he expects Apple shipped 51 million iPhone units in the just-concluded June quarter. A copy of the research note was provided to AppleInsider.
Apple will report its June quarter results on Tuesday, July 21.
UBS's research suggests that consumer demand for the iPhone in the June quarter was at about 49.4 million units. With excess inventory to replenish channels, Milunovich believes the company shipped 51 million units during the three-month period --?an increase from his previous forecast of 50 million.

Apple's growth story continues to emanate from China, where UBS's data found that search volume related to the iPhone is up 100 percent year over year. UBS also found that Apple is finding success in China at multiple income levels, with consumers upgrading to more expensive phones like the iPhone.

Milunovich also revealed that Apple has the highest brand commitment level of any smartphone manufacturer in China, meaning consumers are likely to stick with the iPhone for their next upgrade.

There are some concerns on Wall Street that a slowing Chinese economy could be a risk for Apple, but UBS economist Tao Wang said the current turmoil in the Chinese stock market is not likely to have a significant impact on the nation's economy. He cited data showing that household wealth jumped 6 percent in just the last nine months.

"The correlation between consumption and stock prices is ambiguous," Milunovich wrote. "We think Apple is okay for now, but we will watch the situation closely."

Apple is set to report its June quarter results after markets close in the U.S. on Tuesday, July 21. Market predictions for the iPhone generally fall between 40 million and 50 million units, though more bullish projections from Brean Capital and Morgan Stanley call for shipments of 53 million.
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Comments

  • Reply 1 of 41
    SpamSandwichSpamSandwich Posts: 31,395member
    On a forward looking basis, China's bubble has popped.
  • Reply 2 of 41
    lkrupplkrupp Posts: 7,296member
    Quote:

    Originally Posted by SpamSandwich View Post



    On a forward looking basis, China's bubble has popped.



    So Apple is doomed™

  • Reply 3 of 41
    kent909kent909 Posts: 711member
    Quote:

    Originally Posted by lkrupp View Post

     



    So Apple is doomed™




    Apple may not be doomed but the investors are.

  • Reply 5 of 41
    dougddougd Posts: 278member
    Another record quarter mean AAPL will slide down yet again
  • Reply 6 of 41
    thewhitefalconthewhitefalcon Posts: 4,453member
    On a forward looking basis, China's bubble has popped.

    lkrupp wrote: »

    So Apple is doomed™

    The world economy is doomed, in all honesty. I feel good about getting out of stocks when I did. I don't care about the 401k.
  • Reply 7 of 41
    tmaytmay Posts: 3,935member



    On a side note, IBM announced that it had a 7nm process working with partners Global Foundries and Samsung. Assuming that Apple will be a customer, and that ARM will have the process incorporated into its future architecture, this would be good news for iDevices two to three years out, including the Apple Watch.

     

    A global slowdown actually works in Apple's favor; they have the cash to continue innovation and will also be able to pick and choose from a enlarged labor supply, and the weak competitors will die off.

  • Reply 8 of 41
    danielswdanielsw Posts: 905member

    If investing is anything other than a long-term vote of confidence in a company (the actual definition of "investing") it's legalized gambling. And guess who wins at that game?

     

    Many Chinese are happy to work for a living—happy to earn their prosperity—unlike way too many on this side of the Pacific who now don't know how to do jack, who've degraded themselves into believing in socialist pipe dreams.

     

    Can't wait to listen to the earnings call.

  • Reply 9 of 41
    512ke512ke Posts: 782member

    Correct me if I'm wrong, but my understanding is that China's stock market is wobbly while its economy is still going strong. In fact there have been long periods in recent history where the Chinese economy did really well while its stock market didn't.

     

    So is it clear that China's stock market decline will cause Apple's sales and stock to slide?

  • Reply 10 of 41
    SpamSandwichSpamSandwich Posts: 31,395member
    sog35 wrote: »
    says the guy that knows nothing about China's economy.

    The PE ratio for Chinese stocks is at 15.  Which is not inflated at all.  Do you seriously think the world will stop buying things from China?

    And what about Greece.  Greece GDP is $200 billion.  The EU is 18 TRILLION.  Greece is about 1% of the EU's GDP.  You seriously think they will tank the entire EU?

    This Greece/China stuff is just bullshit from the media feed by Wall STreet manipulators

    I think I know a little bit about how their economy functions having done business there and having seen the reality of the situation instead of taking the word of analysts.

    By the way, what's your position on AAPL now? You insisted it'll be at $150 by end of year. You sticking by that?
  • Reply 11 of 41
    rogifanrogifan Posts: 10,669member
    I do think some of the Watch FUD is impacting the stock right now. Benedict Evans said on Twitter it amazes him how a random, flaky estimate becomes accepted truth in less than 24 hours. I'm even seeing some articles on Apple-centric sites trying to explain why sales have dropped off without even once questioning if Slice Intelligence data is at all meaningful. What's even more amazing is prior to Apple Watch no one knew who the hell Slice Intelligence was. Now all of a sudden they're a respected source of sales data. It's nuts.
  • Reply 12 of 41
    SpamSandwichSpamSandwich Posts: 31,395member
    rogifan wrote: »
    I do think some of the Watch FUD is impacting the stock right now. Benedict Evans said on Twitter it amazes him how a random, flaky estimate becomes accepted truth in less than 24 hours. I'm even seeing some articles on Apple-centric sites trying to explain why sales have dropped off without even once questioning if Slice Intelligence data is at all meaningful. What's even more amazing is prior to Apple Watch no one knew who the hell Slice Intelligence was. Now all of a sudden they're a respected source of sales data. It's nuts.

    Repetition evidently = "truth"

    Horrible, right?
  • Reply 13 of 41
    hmmhmm Posts: 3,405member
    Quote:

    Originally Posted by Rogifan View Post



    I do think some of the Watch FUD is impacting the stock right now. Benedict Evans said on Twitter it amazes him how a random, flaky estimate becomes accepted truth in less than 24 hours. I'm even seeing some articles on Apple-centric sites trying to explain why sales have dropped off without even once questioning if Slice Intelligence data is at all meaningful. What's even more amazing is prior to Apple Watch no one knew who the hell Slice Intelligence was. Now all of a sudden they're a respected source of sales data. It's nuts.



    If it doesn't have a long term impact, how does it really have a negative impact on any of you who might be invested in it?

  • Reply 14 of 41
    gatorguygatorguy Posts: 21,095member
    edit::
  • Reply 15 of 41
    gatorguygatorguy Posts: 21,095member
    sog35 wrote: »
    What are you talking about.

    The Shanghai index is up 15% YTD.  Get your facts straight.
    14% and change but yes you are correct. I glanced at day old news.
  • Reply 16 of 41
    serendipserendip Posts: 93member
    Quote:
    Originally Posted by sog35 View Post

     

     

    China is only 15% of Apple's revenue.

     

    Fact is very few of the 'normal' people even own Chinese stock.  Its basically on the elite .05% and they won't stop buying iPhones even if their paper money has gone down a bit.

     

    And I do say a bit.

     

    YTD the Chinese stock market is still up 15%

     

    China isn't going anywhere. They make friken everything there.  You seriously think the entire world will stop buying stuff from China?

     

    Sorry dude. They feel for the media's total and utter bullshit.




    Agreed, after 3 days of constant barrage from the "China has collapsed" news I actually looked at the chart.  The Shanghai market is now back, after the collapse, to where it was in mid March.  Same thing for Shenzhen.

     

    I can agree with the commentary that the outlook is lower for China but this crash having a negative effect on Apple is dubious.  When Apple last reported there wasn't a run up in the China market.  I'd argue that the run up from March to mid June probably helped Apple as the sudden rich/middle class started buying more Apple products.  Now that sudden wealth is gone and back to where they were back in March...  If I remember right... Apple and all the analysts were pretty bullish on China back in March.

     

    The China stock markets went up 60 some percent in 3 months!!  That bubble has popped in the last month.  No doubt about it and we're back to where we were in March.  

     

    Where we were in March was... China's going to be pretty good for Apple.

  • Reply 17 of 41
    fallenjtfallenjt Posts: 3,980member
    Quote:

    Originally Posted by tmay View Post

     



    On a side note, IBM announced that it had a 7nm process working with partners Global Foundries and Samsung. Assuming that Apple will be a customer, and that ARM will have the process incorporated into its future architecture, this would be good news for iDevices two to three years out, including the Apple Watch.

     

    A global slowdown actually works in Apple's favor; they have the cash to continue innovation and will also be able to pick and choose from a enlarged labor supply, and the weak competitors will die off.


    Apple better get on with IBM on that 7nm to bring out an ass-killing iPhone 7 with at least 50% power increase and destroy the rest of world smartphones.

  • Reply 18 of 41
    SpamSandwichSpamSandwich Posts: 31,395member
    The Chinese stock market grew quickly due to fraudulent valuations and highly leveraged positions. People have been buying stocks using other stocks! It's s giant house of cards and the only reason it didn't fall to zero was the government forcing the purchase of stocks by banks and brokerages. They are also not allowed to sell. This is indicative of a very shaky foundation!
  • Reply 19 of 41
    thomprthompr Posts: 1,511member
    Quote:
    Originally Posted by sog35 View Post

     

     

    agree.

     

    The 2007/2008 great recession did little to slow Apple down.


    The 2007/2008 great recession took AAPL down from 200 to about 80 (pre-split numbers) a very significant haircut, and AAPL didn't recover again for about 2 years.  Sure, in hindsight we can call it just a terrible speed bump and that it ultimately didn't matter.  But if something like that happens again, you can bet that investors will be gnashing teeth and sweating bullets once again.  I will stay brave throughout, of course, but it doesn't mean that there won't be pain.

  • Reply 20 of 41
    rogifanrogifan Posts: 10,669member
    I think I know a little bit about how their economy functions having done business there and having seen the reality of the situation instead of taking the word of analysts.

    By the way, what's your position on AAPL now? You insisted it'll be at $150 by end of year. You sticking by that?

    AAPL down almost 5% this past week. Well the rest of the market rebounded after selling off yesterday AAPL is down almost 2%. Maybe some of that is Watch FUD but my guess is most of it is China worries.
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