Apple hit by iPad sales guessing game
Obsession with totals misses broader picture, the point
Comment So who exactly forecast Apple's fourth quarter - equivalent to calendar Q3 - iPad sales would be so much higher than the 4.19m the company last night announced that it had shipped during the period?
Someone must have done, to prompt all the stories appearing across the internet suggesting that Apple's iPad sales were "lower than expected" - the sober response - or even "flattened" - a frankly bonkers conclusion, given the numbers.
For the answer, look no further than the nebulous Wall Street "consensus", a mean that can easily be knocked out of kilter by a few particularly bullish forecasts - or by some overly negative ones. It seems odd to sneer at a product's sales because they didn't surpass the guesswork - some of it educated, much of it probably not - of folk not directly involved in that item's production.
In fact, 4.19m iPads represent quarter-on-quarter sales growth of 28 per cent on the previous quarter's total of 3.27m units. Hardly a "flat" growth curve.
That makes 7.46m in total, leaving Apple with the task of selling 4.54m more in the last three months of the year if it's to hit analyst expectations - guesswork again - of up to 12m iPads for the whole of 2010.
That would represent sequential growth of just over eight per cent, a rate well below the calendar Q2-Q3 increase and would come at time - Q4 2010, also the first quarter of Apple's 2011 financial year - that's typically the best in Apple's year.
Comparable growth would see Apple shifting 5.36m tablets in Q4, for a year total of 12.82m. You don't have to be a bull or a fanboy to anticipate that, given the current quarter contains Christmas and, in the US, Thanksgiving. And, here at least, the prospect of a sales tax rise in January.
Apple finished the last quarter with three to fours weeks of channel stock for the iPad, slightly lower than its preferred 4-6 week level, CFO Peter Oppenheimer said last night. That shows that the supply issues that have been holding back iPad sales are still present, though possibly to a lesser extent than before.
But that hasn't stopped market watcher iSuppli from bullishly increasing its sales forecast. It reckons Apple will now sell 6.34m iPads in the current quarter, up from the 5.44m it forecast before Apple's announcement last night. The increase makes for full year sales of 13.8m, and the researcher likewise upped its forecasts for 2011 and 2012 to 43.7m and 50.4m, respectively.
Of course, this forecast is no less an example of guesswork than the figure produced by taking a variety of Wall Street predictions and averaging them, and iSuppli may seem to be saying the obvious when it states "the only factor limiting production is the availability of key iPad components".
The crucial point is that it's supply that is hindering iPad sales, not demand, a notion seemingly missed by the investors who led to the dip in Apple's share price following the announcement of the quarter's iPad sales. Shares went down $18 or so between trading days, but regained half of that today.
We'd just add that, in many ways, the number of iPads sold so far - whether they exceed Wall Street forecasts or not - are relevant only in as much as they demonstrate demand for the tablet form-factor. During the last two quarters, Apple had no competition worthy of the name - sorry, cheap 7in Android tablets sold off the pages of Hong Kong websites don't count - and won't really have much to fight against during the current one.
What we want to hear are the sales Apple made when the iPad - the iPad 2 by then - went up against Android 3-based offerings from other major vendors in Q1 and Q2 2011. No amount of guesswork will tell you that now. ®
Another 700 just sold
The place where I work has just ordered 700 iPads. The Salesforce will be losing their Laptops and replacing them with 3g iPads.
We have just finished removing all Flash & Slitherlight from the Web sites & Apps. Guess what? They run faster and use less resources. Perhaps Apple's stance on Flash is based upon some facts?
We tried the currently available Android Tablets. Google are damm right in telling makers to wait for Android 3. Many of them suck when you try to do business stuff when compared to the iPad.
I'm sure that the situation will change next year. Until then Apple will really make hay with the market.
This just cannot end well
I am lost for words. Really I am.
I can sort of understand giving them iPads for when they are on the road but TAKING AWAY THEIR FULLY FUNCTIONAL LAPTOPS?!
What about when they are in the office? Need to review and edit word documents? Do some excel calculations? Use that financial application that only runs on windows? Use ANY software they used to use to help them do their job properly.
You are taking away their swiss army knives and replacing them with a silver table knife, looks good but cannot do everything.
Re: "they're not just picking numbers wildly out of the air"
Yes they are. That's why we have a global recession on. The Stock Markets are full of people who read horoscopes, rearrange their furniture to increase their wealth, or believe in cosmic ordering.
I suspect it went more like this:
A) they're gloming their hopes onto any stock that seems to be selling well, because (now they don't have portfolios of tumbledown houses in poverty-districts of America to sell to each other) they no longer know what anything is worth
B) they all own iPads themselves
C) everyone they know owns iPads
D) they extrapolated that forwards to a set of false assumptions
So the IT industry constantly underestimates how big the sale are, while The Street constantly over estimates the figures. Both sides get the numbers wrong, but claim 'they we're told', when in actual fact they didn't bother looking. They didn't bother looking because, either way, they'd prefer to believe the story the want to be true, rather than find out the truth.
On the bright side, betting on Apple stock does appears to be a sounder move, than how they used to fill their days, and the numbers weren't actually all that wrong. What seemed wrong, was the market reaction, but what did it tell us? The markets are full of irrational people who don't understand where money comes from. Well, we knew that already.
Apple's stock is treated like bullion, these days, anyway: just because the bullion value takes a sudden knock means relatively little to the people who actually use gold to make stuff - or even the people who make a living out of guarding big concrete rooms full of gold bars.
Not quite correct...
"How do you think Wall Street sets the target? From info Apple gives them - they're not just picking numbers wildly out of the air"...
It's their interpretation of the info they get from Apple - otherwise every analyst would come up with identical results, and they would be classed as lowly-paid clerks.
You might just as well say that a punter should get everything right, because they can all see the SP & previous form from the racing pages.
Apple are renowned for marching to their own drum, and they do not feel the need to pay servile obeisance to highly-paid guessers (analysts). Quite rightly so.
I had learned that the 'stupid gadget' sales had flattened, thanks to this article I understand better in what context it was said. Having used one for a week, I can understand that it is a success. I am just to cheap to buy one.