Could Apple Inc. Have Sold 60 Million iPhones Last Quarter?

With Apple's (NASDAQ: AAPL  ) eagerly anticipated December quarter earnings report on tap for Monday afternoon, a few independent analysts are speculating that the company may have sold 60 million iPhones last quarter! This would be well above the average estimate of 54.1 million iPhone shipments among 27 professional analysts surveyed by Fortune's Philip Elmer-DeWitt.

Based on usage data provided by Fiksu and other publicly available information, there is a good chance that Apple will beat the professional analysts' average estimate of 54.1 million iPhone shipments. However, the evidence suggests that Apple probably didn't reach the 60 million mark.

Usage data is the key
Fiksu's iPhone/iPad launch tracker provides a detailed breakdown of iPhone usage by model. As of Thursday, the new iPhone 5s accounted for 13.5% of all iPhone usage and the iPhone 5c represented another 5.3% of total usage. Since Apple aims to keep 4-6 weeks of iPhone supply in channel inventory , it is safe to assume that most of the iPhones in use today had been shipped by the end of the December quarter.

The new iPhone 5s already accounts for 13.5% of all iPhone usage (Photo: Apple)

If we could determine the total number of iPhones still being actively used, it would be possible to translate the 18.8% combined share of the iPhone 5s and iPhone 5c into a unit sales estimate.

Apple sold 150 million iPhones in the fiscal year that ended last September, and another 125 million iPhones in the fiscal year before that . If we include the 54 million iPhones that analysts (on average) believe Apple sold last quarter, Apple has sold roughly 330 million iPhones in the last nine quarters.

The vast majority of those phones are probably still in use, although some have undoubtedly been broken and some may have been "retired" by their users (and not given away, traded in, or sold). Additionally, some of the 72 million iPhones sold in Apple's FY11 may still be in use. Indeed, the iPhone 4 and older models still represent a little over 20% of total iPhone usage, according to Fisku's data.

Estimating sales
Based on all of this information, it seems likely that between 325 million and 350 million iPhones are still active. The combined usage share of 18.8% for the iPhone 5s and iPhone 5c implies that there are currently 61 million-66 million of these new iPhones in use.

Since it is about four weeks since the end of the December quarter and Apple aims for 4-6 weeks of channel inventory, this represents a conservative estimate of how many of the new iPhones had shipped by the end of last quarter.

However, some of those units shipped in the prior quarter. Apple started selling the new iPhones with a little over a week left in the September quarter, and the company sold more than 9 million in the first three days! That early rush more or less depleted Apple's initial inventory, so shipments for the remaining six days of the quarter were probably equal to production: perhaps 3 million units.

If we deduct 12 million units from the combined iPhone 5s-iPhone 5c estimate derived above, it appears that Apple shipped around 49 million-54 million of the new iPhones last quarter.

Apple may have shipped more than 50 million iPhone 5c and 5s units last quarter (Photo: Apple)

It's a little more challenging to estimate Apple's shipments of the older iPhone 4S. However, one helpful signpost is a recent study by Consumer Intelligence Research Partners, which found that the 4S made up 14% of all iPhone sales in the U.S. last quarter.

Older-model iPhones have been somewhat more popular in the U.S. than abroad in recent years. Furthermore, some of the iPhone 4S sales may have been offset by channel inventory drawdowns, as sales of that model are slowing due to the iPhone 5s and iPhone 5c introductions.

It therefore seems reasonable to estimate iPhone 4S shipments at 10% of the total for last quarter. That implies that Apple shipped about 5 million-6 million iPhone 4S units in the December quarter, bringing the total for all three models to 54 million-60 million.

Foolish bottom line
Based on my estimates of the total iPhone user base and Fiksu's iPhone usage data, it appears that Apple shipped somewhere between 54 million and 60 million iPhones last quarter. Thus, while a 60 million iPhone quarter is not impossible, it's a bit of a stretch. On the other hand, the average analyst estimate for 54.1 million shipments appears fairly conservative.

Still, anything in this range will be good news for Apple investors, representing double-digit year-over-year growth. Moreover, with iPad sales also on track for double-digit growth last quarter, Apple could be about to report its first-ever $60 billion quarter! We'll know for sure in a few days, but right now, things are looking very good for Apple.

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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 January 26, 2014, at 11:54 AM, JaanS wrote:

    Adam,

    Nice article. I came up with 60 million iPhones by a different calculation:

    http://www.fool.com/investing/general/2014/01/23/apple-60-mi...

  • Report this Comment On January 26, 2014, at 12:33 PM, twolf2919 wrote:

    You say: "a few independent analysts are speculating that the company may have sold 60 million iPhones last quarter! " - who are those analysts? Your list of 27 professional analysts doesn't show a single 60m estimate.

  • Report this Comment On January 26, 2014, at 1:01 PM, JimBo11 wrote:

    Adam Levine-Weinberg: If Apple is going to sell 60M iphone, it will not add up $55B revenue in the quarter. Thus, it is either the number be higher or the revenue be lower ( than $55B). Last quarter Apple sold more than 31M units of Iphones for $19.5B, the total revenue was about $37B, this is the only item will be increase in revenue for this quarter, all other items will be almost constant or no significant increase, thus in order to increase revenue from 37B to 55B, it will increase 18B or about 30M more Iphone. Plus price erosion, something have to give. Either revenue not at $55B or the unit # is much higher than 62M. Do you believe I have done my math OK?

  • Report this Comment On January 26, 2014, at 2:23 PM, twolf2919 wrote:

    Your math may be ok, but your basic premise - that all other items will be almost constant (other than the iPhone) - is incorrect. Apple introduced a little something called the 'iPad Air" (and Retina-based iPad Mini) which are shattering sales records.

  • Report this Comment On January 26, 2014, at 8:38 PM, TMFGemHunter wrote:

    JimBo: I echo twolf's comment, but you're also comparing to last quarter, rather than last year. There is always a big seasonal sales increase in the December quarter. In fact, Apple's December quarter revenue was $54.5 billion last year. All it needs is a 10% increase to hit $60 billion.

    @twolf: If you look at Philip Elmer DeWitt's final table of estimates, there's one indie analyst over 60 million and one at 59.73 million. http://tech.fortune.cnn.com/2014/01/26/spreadsheet-of-the-da....

    Adam

  • Report this Comment On January 27, 2014, at 10:27 AM, JimBo11 wrote:

    I am sorry I made a mistake to assume ipad unit and value did not increase for the quarter, it should be increased by 4B, thus iphone sale needs to increase by 14B, or about 25M units. Thus, it is possible Apple can sell 60M iphones in the quarter to make up a revenue of 55B or slightly higher. Sorry for the mistake.

  • Report this Comment On January 27, 2014, at 11:04 AM, JimBo11 wrote:

    twolf2919: Yes, Apple may have introduced some fancy units, but the total value of sale may not be increased due to price erosion and strong low price competitions. Apple is lucky to keep the same revenue as last year if it is to sell the same old stuff alone.

  • Report this Comment On January 27, 2014, at 5:36 PM, JimBo11 wrote:

    As I predicted, only ipad and iphone increase Apple’s quarterly revenue, all other items about the same as before. It looks like Icahn is losing its last $500M Apple investment.

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