Investors have been coming to terms with the notion that Apple may have a slow summer. It's not a busy shopping time seasonally, and everyone is expecting new product launches this fall.
Apple's own guidance is also relatively muted, with revenue for the June quarter expected in the range of $33.5 billion to $35.5 billion. At the low end, that would actually be negative sales growth of 4% from the $35 billion in revenue posted last time around.
Is Apple actually in store for a better summer than investors are expecting?
Morgan Stanleyanalyst Katy Huberty believes this may be the case. The analyst is now modeling iPhone sell-through of 31 million units, up from a prior estimate of 26 million iPhones being sold to end users. She believes the Street is perched at a 27 million consensus, so Apple could be tracking toward better-than-expected iPhone units this quarter. Huberty believes that Apple's efforts to make iPhones more affordable through price cuts and installments plans are yielding very tangible results.
There are a few things to note regarding Huberty's estimates.
First, Apple reports based on sell-in, which is the headline figure that investors tend to focus on. For instance, she estimates that Apple's iPhone sell-through was 36.4 million last quarter, lower than the 37.4 million iPhones that Apple reported. In contrast, market researcher Gartner estimated iPhone sell-through at 38.3 million last quarter -- higher than the reported number.
Also, the methodology behind her estimate strikes me as peculiar. Huberty is using colleague Ajit Agrawal's approach, which analyzes multi-country search data from Google Trends and cross-references historical patterns with reported seasonal sales data. The link between Web searches and sales seems questionable to me, particularly because any possible correlation may not be consistent. I buy iPhones all the time and never go to Google to search for "iPhone" before purchasing -- I just go to Apple.com.
Hopefully her model still has some legs to it and proves me wrong, and Apple may have a good summer, after all.
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