Apple's 9 Million iPhones May Not Be So Impressive

Apple (NASDAQ: AAPL  ) spiked yesterday after announcing that it had pushed out 9 million of its new iPhones this past weekend, but now we're getting more of a reality check.

"When I saw the 9 million number I basically fell out of my chair," Piper Jaffray analyst Gene Munster -- a longtime Apple bull -- told Bloomberg TV yesterday. "But you have to put that into context."

He added that the 9 million figure isn't a sell-through figure. It includes what he estimates are 3.5 million of the iPhone 5c units that were shipped to retailers but weren't sold during the weekend. This channel fill is important since Apple has typically only included the latest iPhone in its debut weekend press releases.

At first glance, comparing the 5 million iPhone 5 smartphones that Apple sold during that device's introductory weekend last year to the 9 million iPhone 5c and iPhone 5s handsets sold to retailers this time around sounds spectacular. However, that doesn't look so hot if 3.5 million of those 9 million phones are just giving carriers inventory of the new phone that would replace what was the 4S during last year's cycle. 

The iPhone 5c would be comparable to the 4S that was marked down to the mid-tier price of $100 less than the new phone last year. It may be available in some dazzling colors and carry a new name, but the 5c is essentially replacing what the iPhone 5 would be this time around. 

Not everyone agrees with Munster, who had originally predicted a weekend tally of 5 million to 6 million sold directly to consumers. By his count, the 5.5 million that he projects Apple actually sold over the weekend would be smack dab in his range.

Jefferies analyst Peter Misek feels that Apple actually sold 6.5 million of those devices to end users. Misek's review of the supply chain estimates that the actual sales break down to 4 million for the 5s and 2.5 million for the 5c. 

In other words, according to Misek, the iPhone 5s itself didn't sell as many units as the iPhone 5 last year.  

The comparisons can get even worse.

Apple added China as a launch market this time around. It waited nearly three months after the American launch before introducing the iPhone 5 to China last year, and it then proudly proclaimed that it sold 2 million iPhone 5 smartphones in China that weekend. In other words, last year's opening weekend tally in the countries where the device was available was 7 million last year. That's an important adjustment. 

The iPhone 5 last year and the iPhone 5s this time around were in short supply, making the number of devices shipped by Apple and the devices actually sold fairly similar. This time around the figure is inflated by the iPhone 5c -- which remains readily available -- and the addition of China. Back out the 5c -- or even just the unsold 5c devices -- and it's unlikely that Apple topped the 7 million iPhone 5 smartphones that it sold in Friday's markets during its debut weekend. 

This may still be a good showing by Apple, but it's certainly not the great showing that had skeptics eating crow and at least one analyst falling off his chair.

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Read/Post Comments (23) | Recommend This Article (8)

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 24, 2013, at 6:53 PM, mdl00 wrote:

    Is that the best you can do? Crappy and incorrect article.

  • Report this Comment On September 24, 2013, at 6:56 PM, drbldr wrote:

    If Apple reported 5 million phones sold last year, why would you assume all of them were all sold to end users, but doubt the number represents the same this year? If Munster is correct, and only 5.5 mill were sold to end users this year, maybe only 3 million were sold to end users last year during the first weekend. Either way, the number is higher this year no matter how you count it. It's pretty easy to tell which authors are long or short Apple.

  • Report this Comment On September 24, 2013, at 7:07 PM, timmnsa wrote:

    Please! How many iPhone 5's last year were sitting on carrier, BestBuy, etc., shelves last year. These are sales for Apple, even if not sales for the carriers.

    Also, it was known that China would be included in the rollout, so that should included in Munster's estimates. Sheesh.

  • Report this Comment On September 24, 2013, at 7:11 PM, larryw101 wrote:

    This monkey faced moron has been bashing Apple every step of the way. His reasons are not factual and are all based on rumors or other bear's comments.

    Motley needs to get their act together and broom these bozo authors before they cause more damage the little credibility they have left.

    This guy belongs on a comedy show, not an investment site forum.

  • Report this Comment On September 24, 2013, at 7:20 PM, bhupathi wrote:

    This sounds a bit convoluted and feels like desperate attempt to "make excuses" for the underestimates.

    You can simply look at Apple up-ing their revenue and earnings guidance to say that they had a better than expected weekend. All this stuff about China and sell-through is conjecture which can be conveniently used to fit ones agenda. You can't argue with higher revenue guidance.

  • Report this Comment On September 24, 2013, at 7:22 PM, spakklal wrote:

    Rick the analysts who predicted 5 million were dumbfounded that AAPL sold 9 million and were making up stories regarding Channel fill in. Jim Cramer spoke to Sprint CEO and he told them that the new iPhones were out of stock.

    If gene was talking about Channel Fill in then it would be same thing last year as well. Do check before printing some made up story as facts. Gene Munster is in the Wall of Shame on Cramer's Mad Money.

  • Report this Comment On September 24, 2013, at 7:30 PM, JAVKO wrote:

    CAn't you for once admit to being wrong?

    What a useless analysis of a bunch of desperate paid bashers! Why don't you include MS analysis?

    I guess your SK account is doing well, though.

    Just thank the system for allowing you to freely use the media to distort the facts.

    Apple said they sold 9M iPhones. Are you saying Apple has lied?

    Answer that

  • Report this Comment On September 24, 2013, at 7:35 PM, Mathman6577 wrote:

    I was under the impression that the Motley Fool was intended for long-term investing. Just repeating what analysts say about very short-term results seems to go against the policy.

    The bottom line is Apple shipped 9 million devices and got paid for it. Every analyst that has followed Apple has been wrong ---- some have been way off in their estimates.

  • Report this Comment On September 24, 2013, at 7:45 PM, bobbydig wrote:

    Your site has been infected by the Android advertising virus. Motley Fool is embarrassed because the hipsters that run this site were dead wrong. Basically, you suck.

  • Report this Comment On September 24, 2013, at 7:52 PM, realinvestment wrote:

    I think Apple's 9 million number is not correct. So I am demanding a recount. In the event it turns out to be correct, then I bet you a dollar that that they were purchased with monopoly dollars. All the lines media saw in front of the Apple stores? They were actually for a donut shop that was giving away free food.

    Here are the real numbers - Apple sold 9 thousand iPhones over the entire weekend. Trust me, I know, I have semi-conclusive proof! Because I am a famous blogger, a Wall Street analyst and I have also invented cold fusion.

    Disclaimer (fine-prints) - I hold a short position in Apple.

  • Report this Comment On September 24, 2013, at 8:02 PM, thethreestooges wrote:

    I have 3 Gold 5S iphones. Currently bidding at eBay $960 each. (or you can BUY it for $1500 each). The guy who sold the 5S for $10,100 was not me. Please bid with confidence.

    Thank you APPLE!

  • Report this Comment On September 24, 2013, at 8:06 PM, larryw101 wrote:

    Doesn't Motley see that this kind of senseless and baseless journalism is hurting them?

    They use to be a fairly decent site for thoughtful insight. Not anymore!

    Is this guy writing this nonsense for a penny a click payout to him?

    Sad that Motley has lowered itself to such a low level with this garbage.

  • Report this Comment On September 24, 2013, at 8:10 PM, iphonerulez wrote:

    Apple is not going to win against the bloggers who are constantly trying to undermine the company. No other company comes close to selling high-end devices like Apple does. I think these bloggers and authors can't possibly be Americans. Why would Americans constantly deride an American company. You'd figure it would be something that represents America and they'd be proud of it. I guess not. I suppose most Americans have no loyalty to America. They're only here by lucky circumstance.

  • Report this Comment On September 24, 2013, at 8:10 PM, bobbydig wrote:

    Another RANT - Basically Motley Fool has mislead its readers, readers either lost or did not have a chance to make money, so you write FUD about America's greatest company, Apple. MF sucks.

  • Report this Comment On September 24, 2013, at 8:17 PM, gwconcord wrote:

    Hate to say, but the comments on this article's message board seem more informed and logical than the article.

  • Report this Comment On September 24, 2013, at 8:54 PM, DanManners wrote:

    Rick, I want you to listen carefully to hear the truth. I read everything you do. So here it goes.

    1. There were no presales in the US this time around. So no one phone was sold prior to Friday. That should more than counteract the China situation.

    2. There were not enough phones as last year. But last year, Apple sold mosty new iPhone 5s. This time they sold 5c's because they were different. They had a major new upgrade of the software. That work that Apple created in IOS7 made the 5c a new phone. If they had only the 5s they would have sold very little iPhone 5 phones last weekend if there was no new OS. The OS made the 5c a totally new phone.

    3. While alot of 5c phones were channel fill, then you can go with Misek's number and lower it some but you can't use your worst case scenario.

    4. If you hate yellow and that was the only phone the 5c came in you would not buy it. But having 5 colors means that there are more chances someone would want one. The 5C is a great phone for those that want Apple but don't care for the high tech fingerprint or the faster processor. The 5C will sell alot. Just like the 4s and 4 sold alot the last 12 months. This gives Appel a nice mix.

    5. They raised guidance and sold out keeping their margins high. Apple will hopefully have a China Mobile deal and a larger phone in the near future.

    6. China has only 5 stores and if you wanted a phone you had to pick up the phone at the store. I don't think China moved that many.

    I think you are right in ways but while last year and this year don't match up that well, you point out only those things that would make this years sales look wrong on the high side. Again there were no preorders in this country. There were limited amount of phones and last year there was preorders. So I think that more 5c phones were sold. Regardless, it is gettnig annoying listening to this. There were lines 1 mile long in the UK. The numbers were decent in a world where most analysts like yourself and Misek think Apple will never ever sell a phone again.

  • Report this Comment On September 24, 2013, at 8:59 PM, Boonducts wrote:

    The article does not make any sense. This happens very year. Why this year is different? 9 millions are 9 millions sold by Apple. That's enough.

  • Report this Comment On September 24, 2013, at 9:00 PM, dmvcal wrote:

    Unclear how one sells 9 million of ANYTHING before filling the pipeline. These same analysts seem to have known/heard that AAPL was manufacturing & pipelining in prep for selling kickoff: they all "reported" it via their supply chanel contacts. QUESTION: did 9 million 5c & 5s iPhones get activated as traceable to last weekend? If yes, dhuuh; if no, hype. Either way SOMEONE is fullofit.

  • Report this Comment On September 24, 2013, at 9:09 PM, Shawn097 wrote:

    There is clearly a difference between sales and

    distribution. Distribution numbers "are not and cannot" be counted as sales until sold--they are inventories until the point if sale. Apple absolutely would not report the numbers as otherwise. You make a pretty big assertion that Apple would be willing to put their credibility on the line by reporting false numbers. Do you honestly believe what you're reporting??

  • Report this Comment On September 24, 2013, at 10:30 PM, gavinblur wrote:

    NO it impressive very very impressive and there no other way to look at it! even apple raised their numbers and that should say something - and there are still lines every morning everywhere!

    ]These are sales numbers

  • Report this Comment On September 25, 2013, at 3:08 AM, singaporenick wrote:

    This is such a poor article that it seems hardly worthwhile commenting on it.

    Two points are worth making though:

    (1) Gene Munster,like virtually every other analyst,called it wrong,so he's trying like crazy to excuse his poor call.

    (2) Carriers can't get hold of the phones fast enough,so why is a sale to a carrier less good than a retail sale? Bizarre reasoning

  • Report this Comment On September 25, 2013, at 7:37 AM, jdmeck wrote:

    Just can't make some people happy.

  • Report this Comment On September 25, 2013, at 10:45 AM, Mathman6577 wrote:

    Singaporerick: You are 110% correct, especially on # 1.

    For some reason analysts that follow Apple really don't understand their business model at all.

    They all need to read the book about Apple: "Insanely Simple".

    Apple is not like most other tech companies -- they go after margin (by making a great product that people love) not market share (unlike Amazon, Google. Microsoft, etc.).

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