1/05/2012

Wall Street's low-ball iPhone estimates bump into reality

Reports from Verizon and AT&T suggest they could be off by as much as 45%

UBS' Maynard Um has built a spreadsheet for Apple (AAPL) in which he assumes the company sold 30 million last quarter -- some 800,000 unit higher than the 29.2 million average of 20 Wall Street analysts we polled over the weekend.

But when he totes up the sales numbers coming in from Apple's U.S. carriers, his 30 million estimate doesn't sound quite right. On Wednesday, for example, Verizon (VZ) reported sales of 4.2 million iPhones in the Christmas quarter, more than twice the 2 million the carrier activated in the September quarter.
As Um wrote in a note to clients Wednesday:
Assuming 8mn iPhones from AT&T, 1.2mn from Sprint, & 4.2mn from Verizon, the US alone would make up ~45% of our 30mn unit est for CY4Q. US mix has not been this high since the June qtr of '09 & seems unlikely given the cont'd rapid expansion of int'l countries & carriers since that qtr. US mix in FY11 ranged between 25-29%. If US mix was similar to the high from FY10 of 38% for CY4Q, it would imply demand for ~43.6mn iPhones (albeit unlikely that high given lower supply relative to demand). Each incremental 1mn iPhones is ~$0.21 in EPS.
The 43.6 million number that Um finds so unlikely is 45% higher than his official 30 million estimate. But it's remarkably close to the average estimate of the 15 independent analysts who responded to our weekend poll. Their consensus for fiscal Q1: 43.1 million iPhones.

As several readers have pointed out, I was reading from the wrong column this morning. The consensus among the 15 independent analysts for Q1 2012 is 33.37 million iPhones. Higher than the Street's, but not that high. Sorry for the confusion.


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