AAPL 1Q12 Estimate

  • Revenue: $39.4 billion (AAPL guidance: $37 billion/Consensus: $37.9 billion) 
  • I expect iPad and iPhone to represent nearly 70% of Apple’s quarterly revenue.  My projected revenue is 38% higher than any previous quarter (closest was $28.6 billion revenue reported in 3Q11). 

  • GM: 41.3%  (AAPL guidance: 40%/Consensus: 41.6%)
  • Apple’s margin in 2011 ranged from 38.5% to 41.7%.  A higher iPhone mix during 1Q12 (including 3GS and 4 models) should benefit overall GM with component pricing remaining largely unchanged from previous quarters. 

  • EPS: $10.50  (AAPL guidance: $9.30/Consensus: $9.72) 
  • I expect Apple to report 63% yoy earnings growth.

    Product Unit Sales and Commentary

  • Macs: 5.2 million (25% yoy growth)
  • Mac experienced 22% yoy growth in 2011 (34% growth in portables and 1% in desktops) and I expect similar growth during 1Q12 as consumers flock to the MacBook Air.  Apple will continue to take market share from Windows (early stages of 5-10+ year trend). As the PC market struggles to grow (thanks in part to the proliferation of smartphones and iPad), I view long-term Mac growth near 10% as very respectable. 

  • iPad: 14.7 million (100% yoy growth)
  • iPad supply/demand returned to equilibrium during 4Q11 with Apple reporting an average weekly sales rate of 925,000 iPads.  My 14.7 million iPad estimate assumes an average 1.1 million iPad weekly (13 weeks) sales rate (higher than 4Q11 due primarily to holiday shopping). I am not forecasting any significant change to the iPad channel.  While there have been many rumors and reports indicating softening iPad demand, I think some of that is the reduction of overly optimistic iPad expectations towards a more conservative consensus expectation.  I think iPad will remain a top holiday gift. My 100% yoy growth does contain some conservatism when compared to 334% yoy iPad growth reported in 2011. 

  • iPod: 16.5 million (15% yoy decline)
  • Continued strong iPod touch sales will partially offset the continued decline in Apple’s other iPod models.  Apple refreshed the iPod line-up in 4Q11 and iPods do make great stocking stuffers, so my 15% yoy decline is slightly higher than the 20% and 27% yoy declines registered in 3Q11 and 4Q11, respectively.

  • iPhone: 28.4 million (75% yoy growth)
  • iPhone 4S sales are off to a fast start with 4 million devices sold during opening weekend, a 1-2 week backlog on Apple’s online store (my iPhone 4S ordered from Apple took 15 days to arrive), and continued extended shipping waits at mobile carriers. It is clear that iPhone 4S supply/demand is not in equilibrium. iPhone 3GS (and iPhone 4) price reductions should also benefit 1Q12 sales. Apple’s largest iPhone quarter prior to 1Q12 was 20.3 million sold during 3Q11 (average of 1.7 million per week). My 28.4 million estimate reflects an average 2.2 million per week sales rate, but I admit that sales will be limited to Apple’s iPhone production levels. Another way to conceptualize my estimate: I am assuming 4 million iPhone 4S devices sold during opening weekend and then a subsequent 2 million units sold each following week (not out of the question given continued stockouts and the impact from 3GS and 4 models). 

    Questions can be addressed to me through twitter.