How Many iPhone 5 Units Can Apple Sell in 9 Days?

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The iPhone 5 launch on Wednesday, Sept. 12, is sure to be the most important event for tech investors this year. The Motley Fool will be hosting a live chat where our top tech analysts will answer your questions and break down what the announcement means for Apple and tech investors everywhere. Be sure to swing by at 12:45 p.m. ET next Wednesday for all your coverage of Apple's next big announcement.

In just a matter of days, Apple (Nasdaq: AAPL  ) is going to unveil its iPhone 5. The Sept. 12 date that was making its rounds through the iRumor mill proved to be spot-on, with Apple confirming that date last week. I think it's then safe to say that the Sept. 21 launch date that's been speculated will similarly turn out accurate.

Number crunching
It just so happens that Apple's fiscal fourth quarter closes at the end of the September, meaning the iPhone 5 will only be on sale for about nine days before the accountants take their turn tallying up the final score for fiscal 2012. As we know, last quarter saw a notable sequential drop in unit sales as rumors and speculation over the new model reached a fever pitch, and Apple technically fell short of Street estimates on iPhone unit sales.

They dropped 9 million to "just" 26 million, and while the iPad was able to compensate for some of this as it was just upgraded, the drop-off was still severe. Those aren't lost sales, but rather just delayed as consumers await the iPhone 5.

Right now, the Street is homing in on iPhone unit sales estimates between 22 million and 23 million. That would represent growth of between 29% and 35% relative to the 17.1 million units sold a year ago. With Apple just recently confirming the date, it's hard to gauge whether these analysts are factoring the iPhone 5 launch into their models.

Not quite an Apples to apples comparison
You also need to consider some context to that year-over-year comparison. Last year, the iPhone 4S was unveiled and launched in October, right after the fourth quarter closed, so the entire fiscal Q4 2011 was being hurt by anticipation of the new models.

This year, the iPhone 5 will be unveiled and launched in September, right before the fourth quarter closes, so Q4 2012 will only be partially affected by those same purchasing delays but should also get a little pop for nine days once the device is unleashed upon the world.

The Munster Mash
Longtime Apple analyst Gene Munster with Piper Jaffray has come out with revised estimates with the presumption that the device is indeed launched on Sept. 21. Munster pegs fourth-quarter unit sales between 26 million and 28 million, with most of that jump happening in those final nine days of the quarter.

He believes Apple may sell anywhere from 6 million to 10 million iPhone 5 units within that week alone.

Let me repeat that: potentially up to 10 million units in one week. That's a massive number that deserves some exploration. Hitting that target would be more units than sold in all of fiscal Q3 2010 and would be more than 25% of Apple's current quarterly unit record of 37 million in fiscal Q1 2012. In one week.

Before you brush aside Munster's figures as unrealistic optimism from an uber-perma-bull, remember that iPhone launch weekend unit sales have continued to progressively explode every year. The biggest jump was last year from 1.7 million iPhone 4 units to 4 million iPhone 4S units, more than doubling on an incremental upgrade. How do you think Apple will fare on arguably the biggest upgrade in the product's lifetime?

Source: Apple.

The potential curveball would be if supply constraints hold back Apple's ability to meet demand. We already know that Qualcomm (Nasdaq: QCOM  ) is facing 28-nanometer constraints from Taiwan Semiconductor (NYSE: TSM  ) for its newest batch of baseband processors -- the same ones expected to be in the iPhone 5.

There have also been reports that Sharp has had some delays producing iPhone-bound displays. Sharp was supposed to start shipping screens at the end of August but ran into some manufacturing hurdles that have delayed production. The other two suppliers, Japan Display and LG Display (NYSE: LPL  ) , would need to pick up the slack if Sharp dropped the ball.

Fortunately, LG Display CEO Han Sang-beom recently said the in-cell panels that Apple's expected to use have ramped up after overcoming initial development obstacles and that his company "will be able to supply the panels without any fail."

What's the worst that could happen?
A recent report from Evercore Partners analyst Rob Cihra even found that iPhone supply constraints have been good for its stock performance over the past few years. Cihra thinks this points to customer loyalty since they don't buy competing devices, and teases shareholders to fathom how good the numbers would be if all demand was met.

While Apple is known for building hype and supply shortages also tend to do the same, the company has previously said it would never intentionally keep supply low for this purpose.

Mystery solved!
I'm more interested in the holiday quarter. Next quarter will see the iPhone 5 on sale throughout its duration, and estimates go as high as 50 million units. At a conservative average selling price of $600, that's $30 billion in revenue -- more than all of rival Microsoft's (Nasdaq: MSFT  ) businesses combined.

So how many iPhone 5 units can Apple sell in nine days? A lot.

With the iPhone 5 unveiling next week, investors had better read up on Apple before it takes the wraps off the newest model. As a bonus, I've written a comprehensive report all about the iPhone 5 that's now included as a perk in our premium ticker report on Apple. In it, you'll find a detailed breakdown of critical components expected in the iPhone 5 and how to profit on it. Grab your copy today.

Fool contributor Evan Niu owns shares of Apple and Qualcomm, but he holds no other position in any company mentioned. Check out holdings and a short bio. The Motley Fool owns shares of Microsoft, Qualcomm, and Apple. Motley Fool newsletter services have recommended buying shares of Microsoft and Apple, creating a synthetic covered call position in Microsoft, and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (7) | Recommend This Article (13)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 08, 2012, at 11:09 PM, prginww wrote:

    I wonder If Apple could begin to accept orders earlier then the 21st. If so that could take a lot of pressure off Apple.

  • Report this Comment On September 08, 2012, at 11:23 PM, prginww wrote:

    Apple's fiscal quarter ends on Sept 22 not the end of Sept. Do some research before making an idiot of yourself next time.

  • Report this Comment On September 08, 2012, at 11:34 PM, prginww wrote:

    All the "analysts" talking about 9 days of sales until the end of the quarter should be well aware of how Apple's fiscal year is set up. Each quarter ends on the 4th Saturday of the third month, this timr that is Sept 22, not the end of the month. That will also make figuring out how many sales Apple books in two days much more difficult than estimating nine days of sales.

    Would you all reassess your figures and thinking please.

  • Report this Comment On September 09, 2012, at 2:32 AM, prginww wrote:

    What is Apple's fiscal year?

    Apple's fiscal year 2012 runs from September 25, 2011 through September 29, 2012.

    Found this on Apple's investor relations page.

  • Report this Comment On September 09, 2012, at 9:39 AM, prginww wrote:

    Ouch, Grouch.

    Now who needs to do more research? Sept 21 - Sept 29 is exactly nine days, including the 21st.

    -- Evan

  • Report this Comment On September 09, 2012, at 3:49 PM, prginww wrote:

    Thank you for the research. Normally the end of all Apple fiscal quarters is the fourth Saturday of the month. That gives a consistent 13 weeks in each quarter. However there are an extra 1.25 days each year not accounted for by this method (13x4x7=364). So Apple must every few years have a 14 week quarter. This is that quarter.

    My apoligies to the analysts for my comments but I would like to know if you used 14 weeks in your quarter sales estimates as you will be comparing this quarter to last quarter, and last year's quarter both of which had 13 weeks.

  • Report this Comment On September 09, 2012, at 3:56 PM, prginww wrote:

    I wonder if these Apple iPhones will need to be shipped anywhere? Perhaps the world's largest package delivery company will see positive results from this, especially since they pass fuel costs onto the consumer unlike FedEx (whom recently lowered guidance)?

    I have 899 shares of UPS at a cost basis of $72.25 per share with about $70K cash in reserves.

    On a technical basis, yesterday's SP500 Index breakout was quite significant. On April 2, 2012, the SP500 Index hit a short term high of 1422.38. That high was tested on August 21, 2012 and crossed up to 1426.68 intraday, but then failed to hold above the April 2nd high at the close of trading.

    Yesterday, guess what happened? The SP500 Index closed at 1432.12, which also was the high of the day.

    UPS, on the other hand, is widely viewed as an indicator (a leading indicator as well) of the current and future 'real' economy where real goods and services are performed contrasted with the 'non-real' economy where currency manipulations and sovereign debt purchases move giant imaginary mountains of...well, nothing.

    So what was UPS's story yesterday? UPS formed what seems to be a short term bottom; one in which I bought into based on my criteria for oversold conditions outlined in my very first post on this blog.

    You have to ask yourself, does it make sense for indices to be soaring while UPS is technically oversold? Is UPS right, or is the rest of the market right? I believe that this is a prime example of the market not being efficient. As a sensitive stock like UPS chases after the rest of the market and money flows back into it, I will be selling into that strength and moving on to another oversold, dividend paying, mega-cap stock. These are trades that can be made consistently and with managed risk lower than that of an at-will employee's odds of being fired; I intend to prove this through the example I set with my own money.

    Hoh yeahhh!

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