Please ensure Javascript is enabled for purposes of website accessibility

Apple, Inc. Could Sell Over 13 Million New iPhones This Launch Weekend

By Evan Niu, CFA - Sep 27, 2015 at 9:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Based on foot traffic data to Apple Retail stores, Apple could potentially set a new record for this year's iPhone launch.

It's going to be a big weekend for the iPhone 6s and 6s Plus. Image source: Apple.

It's that time of year again. 'Tis the season for millions of Apple (AAPL 2.54%) customers to line up for days outside of Apple Retail stores in order to get their hands on the newest iPhone model. iPhone launches are very much a global affair, and Apple has finely tuned its ability to coordinate product roll outs of this scale. Considering the common theme of iPhone supply constraints around launch where demand far outstrips available inventory, being able to ramp up supply and ensure widespread distribution is easily just as critical to the new model's financial success as adding new features.

Each year, reports surface of Apple ordering up a record number of iPhones from its supplies and contract manufacturing partners. In July, the Wall Street Journal said Apple was ordering upwards of 90 million units by the end of 2015 in preparation for the launch. Investors shouldn't put too much weight in those reports because Apple's orders dynamically change all the time and even if the report is accurate it's only a sliver of the bigger picture, but at the same time there may be some directionally relevant data.

Now investors have a new third-party data point to consider, which suggests that Apple could sell as many as 13 million iPhone 6s and 6s Pluses this weekend.

Apple Retail foot traffic is soaring
This data point comes from an unlikely source: Foursquare, the popular app used to check in to local businesses. Since Foursquare collects and aggregates location data, the start-up has built a massive database around foot traffic. Foursquare has analyzed historical foot traffic trends for prior iPhone launches as they compare to the official sales figures that Apple subsequently shares, with the hopes of gleaning some insights.

Foursquare believes there is a strong correlation between the increase in foot traffic and the number of iPhones that Apple ultimately sells. Fousquare also cross references quarterly iPhone sales with its traffic data to get something of a baseline. The net result of Foursquare's number crunching is that the company predicts that Apple will sell between 13 million and 15 million iPhones this weekend. That would be quite a beat over last year's 10 million in launch weekend sales, which Apple has already said it is "on pace" to beat.

Here's how 13 million units would compare to prior years. Source: Apple.

Foursquare is the first to admit that its approach has limitations. Foot traffic to Apple Retail stores are just a tiny portion of the relevant data, and Apple sells the majority of its phones through carrier distribution as well as its own online store.

It's the time of the season
There is also another issue of timing. The 2015 launch is occurring slightly later in September than prior years. In fact, Apple's fiscal year just ended yesterday -- in the midst of the launch weekend. That means a portion of the launch weekend total will carry over into fiscal 2016. In prior years, the full launch weekend and perhaps the first week of sales is captured before the fiscal year closes.

The reason why this is important for investors is that Apple will be facing a rather tough comparison to Q4 2014's mind-boggling launch when it shipped nearly 75 million units. It will be difficult to beat such a lofty figure, which is why it's conceivable that Q4 2015 could be the first year that Apple posts a year-over-year decline in unit sales (which would be fine anyway).

Since the market focuses on the high-level figures, cares more about Q4 figures than Q3 figures, and doesn't usually stop to think about changes in channel inventory or nuanced timing differences, any help that Apple can get to hit a higher headline number will be greatly appreciated by investors.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$149.24 (2.54%) $3.70

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.