Apple sales data: Half empty, half full
It continues to amaze me that analysts who specialize in Apple (AAPL) can look at the same data and come to such different conclusions.
Case in point: Reports issued Tuesday morning by Bernstein Research's Toni Sacconaghi and Piper Jaffray's Gene Munster. Both analysts examined the latest NPD data — released a day before Apple's fiscal Q1 earnings call — but they didn't see the same thing.
"Sales Weak," begins the headline in the report by Sacconaghi, who has a history of bearish predictions for Apple. Based on the latest data, he is lowering his earnings and revenue estimates for both the quarter and the year.
"iPod & Mac Appear Solid," counters Munster, one of Apple's strongest supporters. Munster is sticking with his price target of $235 per share. The stock opened Tuesday at $81.97.
The NPD Group tracks retail sales for a broad range of products — including computers and MP3 players — and issues monthly reports that analysts pore over with the kind of attention Nathan Detroit lavished on parimutuel odds.
On Monday, NPD reported that December Mac sales were up slightly from a month earlier. This is how Muster reported it:
"In-Line Results A Positive Surprise. We have analyzed NPD data for all 3 months of the Dec. quarter (Oct., Nov., and Dec.) which is up 8% y/y, in line with the Street at 8% (we believe Street consensus is ~2.5m Macs in the quarter). We believe this data will be perceived as a slight positive given the rebound in the month of Dec. to +4% y/y, up from -1% y/y in the month of Nov., which some investors were using as an assumption for Dec."
Here's Sacconaghi's take:
"Mac. NPD data showed a significant deceleration in U.S. retail sales in November (1% y/y decline; see Exhibit6); desktop sales were particularly disappointing, with units down 38% y/y (in part reflecting a difficult compare). Data from Gartner and IDC suggests the market did not get any better in December."
This theme continues throughout their reports. Sacconaghi sees "significant deterioration" in iPod sales from the NPD data. Munster believes "the segment's outperformance relative to Street expectations is a positive."
Both analysts see the iPhone as a wild card, expecting international sales to offset what Munster calls "headwinds" in the U.S. market. But NPD doesn't provide data for cell phones, so the analysts were on their own.
Not surprising, their iPhone sales estimates are wildly divergent. Sacconaghi is calling for sales of 3.5 to 4 million units in the quarter that ended in December. Munster is sticking with his estimate of 6.4 million, but acknowledges that it might prove to be "aggressive."
Their estimates for Macs and iPods, on the other hand, are not so far apart.
Bottom line, for 2009 Q1:
- Mac sales. Munster: 2.5 million to 2.6 million. Sacconaghi: 2.57 million
- iPod sales. Munster: 18.6 million. Sacconaghi: 18.1 million
- iPhone sales: Munster: 6.4 million. Sacconaghi: 3.5 million to 4 million
We'll learn the truth soon enough. Tune in here after the markets close on Wednesday for our live blog of Apple's Q1 conference call.
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hey spinnaker,
when you say "we're pretty much obliterating PC and Linux", who's the "we"?
Does "we" own Apple? Is Apple some kind of tribal or religious group of the "we"?
most propbably, it is the latter, you naive iWorshipper.
Apple will be one of the few companies that remain prosperous in these times. Sure, sales will go down- But we're pretty much obliterating PC and Linux.
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Although Gene has dropped his price target from $250!! just over a year ago though, apparantly adding in a recession scenario to his estimates.
The Microsoft propaganda machine works 24/7/365 to discredit the companies and stock values of all who are on the Microsoft Enemies List.
I agree with at least one other poster. It would be very interesting/valuable to have historical analysis of the accuracy of these two analysts. Of course, everyone who reads a prospectus knows that past history is no guarantee of future results, but it can indicate trends 
The other thing i note is a -potential- conflict between "absolute results" and "sector performance". I suspect that all computer sales are down, but that AAPL will outperform other makers, and I think that's the argument that Munster is making.
dave
Remember, Toni "Spaghetti" was the analyst who last spring lowered his 2008 calendar iPhone sales estimates to just over 7 million. Apple nearly achieved that number last quarter alone. He´s like a weather forecaster on television…spends most of his time telling you whjy he was wrong. How this expert(?) keeps his job is a mystery to me.
Please start doing columns on Google.
This is a company and stock that is EXTREMELY over-valued and is a disaster waiting to happen. If you guys put half the effort into Google that you did on Apple and causing all sorts of issues, you'd be amazed at what you would find about Google.
Thanks Philip for the balanced view. I have been scratching my head over the same schizophrenia amongst analysts!
Name calling usually comes from those who feel unsure about their own convictions in an attempt to compensate, Nick. Confidence, on the other hand, usually rises above petty words. Despite the consumer or Jobs, I feel that this stock has been drastically shorted based on the same level of hype that made it previously skyrocket, if not more. I feel good about a long position at these levels.
Who's the Moron? Apple has a loyal and growing "following" that will stay enthused even during tough times. I just bought 2 new Macs. Stock price of $125 by April… when the snow melts and attitudes rebound… so will the stock price. Great products, loyal / fanatic customer, lots' of cash, little or no debt = Success!
$235 price target? When would that be… 2050? The economy is a disaster. The market is convinced that Steve Jobs is Apple and it seems quite possible that Jobs will not return. I wouldn't expect this stock to be on solid footing for at least a year and that's being optimistic.
How can you report Munster and Sacconaghi in the same light? I also hope you guys do an ACCURATE reprisal of ALL the "analysts" who cover this company and what their estimates were vs. reality after tomorrow's announcement. Then, everybody can consider their advice in the future based on historical performances. Why would anybody consider the advice of "professionals" who are wrong by more than 50%?
Hmm….trust Gene, or Toni. Toni ranted for so long that Apple would never sell 10 million iPhones in calendar 2008. And, gee, they announced that at the end of the *3rd* quarter. I'll bet the house that Gene is closer on the iPhone number.
Notice Tony said that Apple's GROWTH is decelerating. Apple is still growing in this economy, IOW, it's just not growing as fast as it was (right after the iPhone 3G came out I suppose). Think about that for a minute. Tony, apparently, thinks that Apple should not only grow during this recession, but that it's growth should also accellerate.
Wow. How many other companies does he expect this of?
I bet Microsoft would love it if there WAS PC growth. Instead, they are losing marketshare to Apple.
What do you expect from Tony? He is like a broken record. Apple usually outperforms even Munster's expectations, then guides low, and the traders short the stock again. It can only go on so long though. iPhone deferred revenue will come in handy this year…
Moron. We won't see $100 again for a long time in this climate. Face it, you should have sold at $150+ when you had the chance.
$1.93 GAAP EPS
2.45 million Macs
6 million iPhones
18 million iPods. 8 million iPod Touches.
Share price at $100 by February 1st.
Considering 2/3 of those independent auditors that feed news to the stock market receive wages from those Apple's competitors, it looks numbers are overflowing their desktops.