Apple’s 5 million iPhone 5 sales: What analysts are saying
September 24, 2012 10:49 AM
In its Monday morning press release, Apple merely announced that it sold a record 5 million iPhone 5s in the three days after Friday morning’s launch, selling out its initial supply. That compares with 4 million iPhone 4S units sold in the same time period last year.
“Demand for iPhone 5 has been incredible and we are working hard to get an iPhone 5 into the hands of every customer who wants one as quickly as possible,†said Tim Cook. “We appreciate everyone’s patience.â€
The market was not so patient. The stock opened at $686.91, down $13.18 (1.9%) from Friday’s close, and the analysts who had predicted sales as high as 10 million units had some explaining to do.
Below: Excerpts from the notes to clients we’ve seen so far. As new ones come in, we’ll put them on top.
. “We expected 6-8 million over the opening weekend… Clarification â€" recall the 5mil+ iPhone 5 reported sales only takes into consideration: 1) what was sold into partners (e.g., retail outlets, carriers, etc.), 2) sold in AAPL retail stores, and 3) direct to customers only if they signed for the device. Importantly, this doesn’t take into consideration units in delivery direct to customers (i.e., AAPL must have signature of acceptance by customer before it is counted as a sale) and we estimate units in transit could be in the millions currently. We believe the negative pre-market action in AAPL (i.e., down ~2%) is an over-reaction and would be buyers of the stock here.â€
“This morning Apple announced the sale of 5 million iPhone 5s in the first weekend compared to our 8 million estimate (6-10 million range). We believe there are two factors that negatively impacted the number. First, our sales expectation assumed that Apple would include all phones pre-ordered online. We believe that this may have been up to 1 million additional units as units pre-ordered after the middle of the first day were projected to be available in October. Second, we noted 1.25 days of Apple Retail inventory compared to 2.5 days during the 4S launch. Our 8 million estimate assumed full weekend availability and the counting of all online pre-orders. We believe that if supply were not a constraint and Apple included all pre-orders, the launch weekend number would have been closer to 7-8 million, assuming ~1 million October pre-order sales and an additional 1-2 million units at retail.â€
“We are not overly concerned with this ‘disappointing’ number as we believe this is a classic case of near-term expectations getting out of touch with reality. We find it unfortunate that some analysts continue to publish irresponsible estimates without taking into account realistic demand trends and potential supply constraints on new in-cell touchscreens.â€
“This morning, Apple announced that iPhone 5 sales exceeded 5 million during the first three days of retail availability and below our expectations (we were at the lower end of expectations). We believe this shortfall is largely due to supply availability and the fact that most consumers are opting for the pre-order option. We remain aggressive buyers of Apple on any weakness in the stock price this morning as we believe Apple has another blockbuster on its hands with the iPhone 5 and we expect the “iPad Mini†to launch in the coming weeks.â€
, who had predicted first weekend sales of 6 million, offered five points by e-mail:
1. They were only able to offer 25% more units over the launch weekend than what they could offer with the 4S. That implies that either they are not fully ramped or their ramp started later than last year. This could be because it’s a new product vs. last year’s modest changes from the 4 or it could be that they are constrained on components.
2. In retrospect it seems they knew they would be constrained in the opening because they did not expand the footprint from last year. The country count went up by 2 but did not add big countries.
3. The demand is far higher than last year given the higher number of pre-orders and anecdotal counts of people waiting in line.
4. The capex story implies that production should be at double the rate from last year, but that does not help with launch. If they produce twice as much but have half the lead time then the product on hand is the same as last year. I suspect the ramp is a bit slower than they had hoped. The press release seems apologetic about them not being able to meet demand.
5. They are more aggressive in terms of country launches by end of year so maybe they will make up for the shortfalls during the fourth.
Posted by Philip Elmer-DeWitt
Categories: Apple 2.0
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