Analysts Point to Weak iPod and iPhone Numbers
A number of analysts are highlighting weaker than expected iPod and iPhone sales numbers. Toni Sacconaghi of Bernstein Research calls Apple’s 10 million iPhone sales target as “optimistic” without “significant price cuts or new model introductions”. Sacconaghi expects Apple to sell about 7.9 million units, far short of Apple’s own announced target. The Bernstein Research analysts also calls attention to cutbacks in first calendar quarter iPhone production as further evidence that Apple will likely miss its sales target. Sacconaghi says “higher than expected” iPhone unlocking has also cost Apple hundreds of millions in lost revenue. BMO Capital Markets analyst Keith Bachman is also skeptical on Apple’s target of 10 million units and cuts his target price from $160 to $140 per share.
Piper Jaffray analyst Gene Munster writes in a note to clients that initial analysis of the March quarter iPod NPD data point to a 6% year-over-year decline in iPod sales. While Wall Street expects Apple to sell about 10.8 million iPods in the March quarter, the data suggest 9.5-10.3 million units for the quarter. Munster reiterated his belief that Apple plans to make the iPod into wireless mobile units “capable of running mobile applications”.
Morgan Stanley is more positive on Apple by saying “new product announcements and margin expansion will drive AAPL shares higher in 2008”. Morgan Stanley points to strong Mac shipments, favorable component pricing, and expansion outside US as “positive influence on revenue growth”. The firms also predicts that Apple is slowly “preparing for meaningful product launches.”
Please read an update to this story here.