Apple analysis paralysis

Apple is due to announce its 1st Quarter 2012 results today after Wall Street closes. Our graphic tries to summarise the conflicting analysis that surrounds these results, and adds to it, by including our, definitely upper quartile, view!

Click to enlarge

We have found a couple of really excellent insights into the forecasting game.

The first comes from Philip Elmer-DeWitt of Fortune and it summarises the Independent analysts as well as the Institutional/Market view. We’ve included his spreadsheet showing the constituents of both categories

The second is close to a “How to do your own forecast of Apple’s earnings per share” from Andy Zaky at Seeking Alpha. He takes you from the Apple earnings guidance information to his/your forecast. We feel he’s a little unkind to Apple in deriding their guidance particularly as it is issued usually a couple of months ahead of the period to which it relates eg this one was issued on 18 October .  Having said that it’s a superb article with a straightforward explanation of his methodology.

In our estimate we built up the sales figures from units using the following Average Selling Prices (ASP’s):

  •  Mac -    $1,300
  • iPad -       $625
  • iPhone -   $650
  • iPod –      $175

It’s interesting to note that since the iPod started shipping back in 2001 all major new product introductions have had higher prices. Also noteworthy are their introduction dates 2007 & 2010.

This quarter will see an Apple product having the highest ever unit sales volumes with 30mn ish iPhones surpassing the iPods maximum of 22.7mn unit sales in their Quarter 1 of 2009.

In Worldwide Market terms the mobile market in 2012 is reckoned at about 1.8bn handsets and is far and away the largest market Apple competes in. It arguably created the iPod & iPad/(tablet) markets and the latter may be 130mn units this year with Apple likely having  more than 50% thereof.

The way forward – well to keep up anywhere near its phenomenal growth rate it has to continue with its trend of introducing high ASP devices either displacing existing products or creating/expanding a product market.

TV’s are the analysts favourite and with an existing market of around 250m per annum its certainly large enough. We are still going for “i” or “iVision” as the name rather than iTV. As far as other future products are concerned we have no doubt that at least 1 or 2 are under serious development in Cupertino but will they ever surpass the 30mn figure for quarterly sales?

After release of their results we will update our graphic and apologise for our grossly inaccurate estimate!

A technical point on Apples accounting period follows plus details of how to listen to their webcast of their results and links to a couple more analysts views even at this late stage!

Apple does a 13 week quarter with its year end on the last Saturday in September and to keep in balance with our rather illogical calendar every six years or so it has to have a 14 week quarter which it attributes to the first quarter. This is such a quarter – the last one was in 2006.

Apple will be broadcasting its conference call at 10pm GMT tonight as follows:

“WEBCAST: Apple will provide live audio streaming of its FY 12 First Quarter Results Conference Call using Apple’s industry-leading QuickTime® multimedia software. The live webcast will begin at 2:00 p.m. PST on January 24, 2012 at www.apple.com/quicktime/qtv/earningsq112 and will also be available for replay for approximately two weeks thereafter. The webcast is available on any iPhone®, iPad®, iPod touch® or any Mac® or PC running QuickTime 6 or later. If you do not have QuickTime installed on your Windows PC, it is available at www.apple.com/quicktime.”

A couple or three  late / up to the minute analysts views:

iPhones are tops

Can Apple keep it up

Apple leading the way

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