Close

UBS Says Consensus on December Quarter Apple (AAPL) iPhone Units Could be 10% Low

December 5, 2014 11:36 AM EST
Get Alerts AAPL Hot Sheet
Price: $171.48 -1.06%

Rating Summary:
    39 Buy, 25 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
Join SI Premium – FREE

In a note to clients today, UBS Apple (NASDAQ: AAPL) analyst Steven Milunovich said the consensus on the December quarter iPhone units could be 10% low.

The statement comes after the release of the firm's new UBS Evidence Lab iPhone Monitor, which seeks to predict the number of iPhone unit sales for the current quarter using Google search as the input. The Monitor tracks consumer demand (sell-through) while Apple reports sell-in. Consequently, the firm notes they need to take into account supply constraints or channel inventory changes that would create a difference between the reported iPhone figure and the Monitor's reflection of demand.

For the December quarter, the Monitor predicts 70.9 million iPhone units vs the consensus Street estimate of 64 million.

Based on the apparent strength of demand, UBS is increasing its iPhone forecast from 63mn to 67mn units, meeting their new model halfway given continued availability issues.

The firm's revenue estimate is now $68 billion, above the guided range of $63.5-66.5 billion. Their new EPS estimate is $2.57 compared to the consensus of $2.53.

Commenting on speculation that March quarter production has been reduced, the firm notes checks do not find material change. However, given the ramp in Dec they do expect a sequential decline of 40% or so in March, mostly in the smaller iPhone 6. They think interest in the larger 6 Plus may be greater than Apple expected, necessitating a mix shift.

The firm's UBS Evidence Lab Smartphone Study found strong 6 Plus interest, especially in China. The CIRP survey said that sales in the US have been 3-to-1 in favor of the smaller iPhone 6, but that may be underestimating true 6 Plus demand given tight supply.

The firm reiterated a Buy rating and price target of $125 on AAPL.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $115.49 yesterday.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Analyst EPS Change, Hot Comments

Related Entities

UBS