Apple's Latest Good News

Apple (NASDAQ: AAPL  ) investors are (im)patiently waiting for the company to release its official December quarter sales numbers in a couple of weeks. But while waiting can be hard, good news emerged this week that could hint at how the quarter went and what to expect from its upcoming China Mobile launch.


Source: Apple.

First off, a survey by research firm CIRP showed that iPhone 5s sales made up 59% of all iPhone sales in the December quarter, followed by the 5c taking 27% and the 4s nabbing 14%. The survey was conducted with a small sample of just 500 respondents, so it's not exactly a scientific poll. But it could offer some early insights into how the 5s is stacking up against the rest of the iPhone lineup. CIRP's data for the same time last year showed the iPhone 5 taking 50% of all iPhone sales at the time.

That survey comes just as AppleInsider reported total iOS device sales hitting an impressive 80 million for the December quarter, lead by sales of the iPhones 5s and iPad Air. The information comes from data from analyst T. Michael Walkley, who said that about 54 million iPhones were sold in the quarter and 24.8 milion iPads. That would be a 13% year over year increase for iPhone sales and an 8% increase for iPads.

But that's not the only good news for Apple investors this week. A report by The Wall Street Journal said that Foxconn just shipped 1.4 million iPhone 5s units for the upcoming launch on China Mobile. Research firm Gartner said that Apple typically sells about two million iPhones per month in China, so if the 5s shipping numbers are correct, it could mean good news for Apple's upcoming launch at the end of this week. But Apple investors should keep in mind that there's no indication of what future shipping numbers will be from Foxconn, so it's hard to tell if Apple will continue asking Foxconn to ship that many each month, or if it's stocking up on iPhones ahead of the launch.

Source: Apple.

Putting it all together
So you may have already put it together that none of these numbers actually come from Apple. While it's certainly not advisable to make investing decisions based on speculation, the information above can help paint a picture of how Apple's latest quarter may play out for current investors, and offer a sneak peak at how its launch on China Mobile's massive network will go.

Apple will release its first quarter 2014 results in about two weeks, and investors should certainly be eager for this one. The quarter ending in December will be the first full quarter of iPhone 5s and 5c sales, and include the launch of both the iPad Air and the iPad Mini with Retina display.

The release of the iPhone 5s and iPad seems to have resonated with consumers, and this past year Apple made some significant gains in the enterprise space as well. As Apple reports its latest numbers, the company is selling devices that are moving further into businesses, and Apple can springboard off of that momentum as we start 2014. With a rumored iPad Pro, and possibly iWatch, expected to launch this year, Apple could be moving into some very new territory over the next few quarters. For now though, investors should expect a strong quarter from the company once the official numbers come out later this month and take the current data as an indicator of how well the company is selling its current devices.

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  • Report this Comment On January 15, 2014, at 10:58 AM, Microwave52 wrote:

    Bear in mind that Chinese New Year is Jan. 31, so an explosive start to sales on China Mobile should be expected.

    After CNY sales may soften a bit, but not much as the Chinese appetite for luxury items is insatiable. An iPhone is a status symbol throughout the world, but even more so in China. Especially the gold iPhone 5s as gold represents wealth. It all revolves around the concept of face, and having a gold iPhone 5s means that the owner should be paid attention to.

  • Report this Comment On January 15, 2014, at 11:03 AM, Microwave52 wrote:

    Look at the exceedingly positive comments which Tim Cook has been making about the Chairman of China Mobile. Tim's bent over backwards to applaud this man. It's all about giving face, Tim knows this, and Apple will be rewarded as a result.

  • Report this Comment On January 15, 2014, at 11:24 AM, dwilh51183 wrote:

    ANALYSTS HAVE UNDER-ESTIMATED THE CHINA MOBILE DEAL. THEY ALSO UNDERESTIMATED THE POWER OF A 45 BILLION BUYBACK THAT'S REMAINING. EVERY $10 BILLION WORTH OF BUYBACK RESULTS IN A 100 POINTS OF GAIN FOR APPLE STOCK

  • Report this Comment On January 15, 2014, at 11:24 AM, dwilh51183 wrote:

    INSTITUTIONAL MANAGERS & MUTUAL FUND MANAGERS , PLUS INDIVIDUAL INVESTORS ARE STARTING TO SELL THE HIGHFLYING "EVERY STOCK GOES UP PE" OF THIS RALLY BEFORE THEY ANNOUNCE EARNINGS AND GET SLAMMED ....NOW THEY ARE GOING INTO A SAFE STOCK LIKE APPLE WHO THEY KNOW IS GOING TO HAVE BLOCKBUSTER RECORD EARNINGS

  • Report this Comment On January 15, 2014, at 11:24 AM, dwilh51183 wrote:

    In a piece this morning by Paul Mozur of The Wall Street Journal, China Mobile chairman Xi Guohua noted “that since it began taking preorders for the iPhone in late December, it received several million orders, signaling strong initial demand.”

    Cook was in a CNBC interview this morning with the channel’s Eunice Yoon, ahead of the official first day of sales, this Friday, joined by chairman Xi.

    “We sold more iPhone units in greater china than ever before,” said Cook. Asked by Yoon about estimates of sales of perhaps 30 million extra iPhones this year from the deal, Cook said Apple looks at the deal “for the long term.” Xi said he was given one of the first iPhone units made by Apple for China, the gold model 5S, and he plans to switch from using another brand of smartphone.

    In the first responses from the Street, Piper Jaffray’s Gene Munster writes that the remarks about several million pre-orders “is a positive read for China Mobile iPhone demand” and supports his modeling of perhaps 3 million units of iPhone from China mobile in the March quarter. He thinks Apple may forecast the quarter “~2% ahead of Street expectations” as a result.

    And Wells Fargo’s Maynard Um reiterates a view that “the deal is clearly positive for the company and would help to drive iPhone unit strength in FQ1 2014 as well as absorb seasonal slowing in FQ2 2014 at other carriers.”

    Shares of Intel (INTC) are up 20 cents, or 0.8%, at $26.72, as the stock gets yet another plaudit this morning, from BMO Capital Markets’s Ambrish Srivastava, who raised his rating to Outperform from Market Perform, and raised his price target to $31 from $21, writing that “Being big Star Wars fans, we would love to say the Empire Strikes Back…however, in this case, it is more of a case of the Empire gradually making a come back. Either way, we see meaningful upside to the stock from its current levels.”

    In other chip news, shares of Linear Technology (LLTC) are up 71 cents, or 1.6%, at $45.90, after the company yesterday afternoon reported fiscal Q2 revenue in line with expectations but beat on the bottom line by a penny. The company forecast Q3 revenue in a range of $344.6 million to $355 million, which is higher than consensus of $345.9 million going into the report.

    The company also raised its dividend a penny to 27 cents.

    Terence Whalen of Citigroup, who has a Neutral rating on the stock, writes that Linear’s report, the first of the analog chip makers to report the December quarter, “is a decent (but not perfect) leading indicator for the overall group due to lack of consumer exposure” and that it is “a positive overall read for broad based analog names.” He recommends buying shares of Analog Devices (ADI) and Microchip Technology (MCHP) based on the report.

    Shares of 3-D printing company ExOne (XONE) are down $5.59, or 9%, at $56.67, paring some losses from last night, after the company warned revenue last quarter slipped below expectations because of delays in some printer deals in various world markets.

    The stock has gotten one downgrade this morning, that I can see, from Canaccord Genuity’s Bobby Burleson, who cut his rating to Hold from Buy, and cut his price target to $55 from $75, writing that “multiple revisions to expectations have undermined our confidence in guidance.”

    Jefferies & Co.’s Peter Misek, who has a Buy rating on the stock, and a $72 price target, writes that “ExOne maintains its long-term organic annual revenue growth rate of 40% to 50% and overall, we continue to believe that ExOne is well positioned for the near-term mass manufacturing opportunity in aerospace followed by the auto mass manufacturing opportunity.”

    In other 3-D printing news, shares of 3D Systems (DDD) are down $3.57, or almost 4%, at $87.64, following an initiation this morning by boutique firm Stephens & Co. at Equal Weight, with a $95 price target.

    Twitter (TWTR) continues on the upswing, despite two lukewarm views from the Street in the last 24 hours. This morning, Nomura’s Anthony DiClemente started the stock at Neutral, with a $60 price target, preferring Google (GOOG), which he starts at Buy, with a $1,300 target.

    And yesterday, FBN Securities’s Shebly Seyrafi started the stock with a Sector Perform rating and a $65 target, extolling its unique social media characteristics, but warning about a lockup expiration in May of 464 million shares against the current 545 million shares outstanding, and 223 million-share float.

    Shares of Micron Technology (MU) are down 10 cents, or 0.4%, at $23.57, despite an encouraging article this morning by DigiTimes’s Josephine Lien and Jessie Shen stating that DRAM supplies industry-wide are expected to remain tight this year, citing multiple unnamed “industry sources.”

    3-D printing, China, chips, earnings, iPhone, mobile, semiconductor, smartphone

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  • Report this Comment On January 15, 2014, at 11:35 AM, Microwave52 wrote:

    I wouldn't be surprised if the gold colored iPhone which Tim Cook gave to the China Moble chairman had engraved (in Chinese) on the back, "To my dear friend Xi Guohua. From Tim Cook". Give the Chairman as much face as is possible.

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