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Fortune provides upbeat Apple earnings, revenue estimates for Q3 2014
Over the past few days, Philip Elmer-DeWitt at Fortune has been posting his compilations of what Wall Street analysts expect Apple to announce today. This morning, he put the icing on the financial cake with revenue and earnings estimates from amateur and professional analysts alike, and those estimates (seen above) look wonderful. Apple's guidance from last quarter expected revenue in the range of $36 to $38 billion, with gross margins in the 37 to 38 percent range. The average of all estimates from analysts shows earnings topping Apple's guidance at about $38.31 billion, with gross margins at the top of Apple's range -- 38 percent. The analysts also expect earnings per share to be around $1.26. Those estimates are from 34 Apple analysts, and they represent a leap in revenues of 8.5 percent year over year, with earnings up 18 percent for the year ago quarter. Be sure to join our liveblog of the Apple earnings call later at 5 PM ET this afternoon.
Nintendo posts $229M loss, Wii U estimates down by 60 percent
Nintendo fell slightly short of the reduced financial projections it set in January, with the Wii U reaching 2.72 million shipments for the fiscal year ending March 31, 2014. However, the system remains way off Nintendo's initial projection of 9 million, so it's no surprise to see more conservative estimates for the fiscal year ending March 31, 2015 of 3.6 million units. That's 60 percent less than Nintendo originally projected for the previous year. Total Wii U shipments are now up to 6.17 million, nearly a year and a half after the console launched. On the software side, Nintendo revealed figures of 32.28 million units to date, with New Super Mario Bros. U (4.16 million), Nintendo Land (3.09 million) and Super Mario 3D World (2.17 million) leading the way.
Pachter: Wii U sales hit 55,000 in April, 20,000 below Wii
Nintendo's Wii U sold 55,000 units in April, down 19 percent from March, while the Wii sold 75,000 in April, down 16 percent from last year, Wedbush analyst Michael Pachter estimates. To compare, he says Microsoft sold 205,000 Xbox 360 units and Sony snagged 165,000 sales of the PlayStation 3 this April. By these numbers, sales of the Xbox 360 are down 13 percent and PS3 sales are down 5 percent year-over-year. Nintendo hit 185,000 sales of its 3DS last month, a 46 percent jump in sales from the previous year, Pachter says. Sony's Vita is down 57 percent from 2012, selling just 30,000 units this April. These are of course the standard Pachter estimates, which can only mean one thing – the official numbers are on their way, via the NPD. Those figures are expected on Thursday. As of March 31, the Wii U has sold 3.45 million units since its launch, below Nintendo's initial forecast of 5.5 million, and even January's adjustment to 4 million. Nintendo expects to have sold 9 million Wii U consoles by next fiscal year, ending March 2014, with sales spurred by the release of "key Nintendo titles."
iPhone boost helps China Telecom profits beat estimates
It's a pattern that has been repeated over and over; a wireless carrier adds the iPhone to its mix of products and profitability improves. The latest beneficiary of this little bit of Apple magic is China Telecom, which began selling subsidized iPhones last year. The company reported that net income for the quarter fell 17 percent to 2.36 billion yuan (or about US$380 million) from the previous year, but that figure exceeded the 2.04 billion yuan analysts were predicting. The iPhone helped China Telecom by boosting sales of wireless data dramatically. The company noted that mobile data traffic on its network essentially tripled last year after adding the iPhone to its stable. China Telecom is the third-largest wireless carrier in the country with 160.6 million users, trailing far behind first-ranked China Mobile with 710.3 million customers and China Unicom at 239.3 million customers. The company was formerly a landline-only telecom operator, entering the wireless business in 2008 through the purchase of one of China Unicom's mobile divisions. Things aren't all rosy for China Telecom, though. The carrier has reported three consecutive declines in quarterly profit, and the company recently finished the purchase of a 3G network that it will now need to upgrade. As a result of those upgrades, the company expects its capital spending to rise 40 percent in 2013.
Gartner and IDC: PC shipments tumbled over 8 percent in Q3, only ASUS and Lenovo escaped unhurt
We don't often summarize market share in one word, but: ouch. Both Gartner and IDC have trotted out their preliminary estimates for PC market share in the third quarter, and the two agree that this summer was a dire one for the traditional computer. Outside of ASUS and Lenovo, whose price-focused strategies and key acquisitions kept them ahead of rivals, virtually every major vendor saw its PC shipments collapse versus a year ago, often by more than 10 percent. Total worldwide shipments declined by more than 8 percent in either estimate -- enough to make a flat second quarter seem rosy by comparison. Lenovo took the top spot in Gartner's study, although IDC is counting workstations and kept HP in its usual lead. As for the US, it's almost better that we don't look. Gartner and IDC believe that the American market sank by respective 13.8 or 12.4 percent amounts, and the steep global declines repeated themselves in the one country for everyone but Lenovo. Even a market share gain for Apple came only because its shipments dropped at a gentler rate than most of its peers. Whether it's the US or worldwide, don't assume that inventory clearances ahead of Windows 8 were the only factors at work, though. Both research teams point to continuing world economic troubles as influences, and IDC contends that buyers are still skipping PCs in favor of smartphones and mobile tablets. There's often a jump in computer sales between the summer and the fall, especially with a new OS on the way, but we wouldn't count on a return to the halcyon days.
iPhone 5 worldwide sales sorted by region
Sameer Singh of TechThoughts did some number crunching to break down iPhone sales based on geographic location. He approximated shipments for sales and looked at the US, UK, Japan and Asia-Pacific in his analysis. Not surprisingly, he found that demand for the iPhone peaks in the launch quarter and then declines in the subsequent quarters. This trend is seen in the US, UK, Japan and even in Asia-Pacific, which is surprising. Asian-Pacific countries like China are considered to be emerging markets with a large, untapped reservoir of customers. You would expect sales to continue to grow and not reach saturation in one quarter. Singh hypothesizes that the iPhone 5's high price tag is limiting its expansion in China, and claims that the smartphone growth in that region will be driven by low-cost, entry-level handsets. In the past, Apple has been unfazed by results suggesting the iPhone won't successfully break into emerging markets. Tim Cook repeatedly has said in Apple's quarterly earnings conference call that he believes customers will pay more for the high-quality design and improved performance of the iPhone. Cook also pointed out Apple offers the older models of the iPhone at discounted prices. Even though they are a year or two old, the lower-priced iPhones usually offer a better set of features than their entry-level Android counterparts.
iPad estimated to be cornering nearly 73% of Chinese tablet market
We're used to seeing tablet market share illustrated on the world stage. China, however, has usually been untouched. Analysys International has taken a crack at decoding the market and has bucked a few expectations in the process: according to its estimates, the iPad's lead is even larger in China than it is worldwide. About 72.7 percent of all tablets sold in the country during the second quarter were Apple-flavored, while homegrown hero Lenovo was a distant second at 8.4 percent. Everyone else had to contend with less than four percent and reflected the more diverse Chinese technology sphere -- relative heavyweights like Acer, ASUS and Samsung had to hob-nob with brands that have little recognition elsewhere, such as Eben and Teclast. The researchers credit Apple's lead, a 7.8-point gain, to a combination of the new iPad and a price-cut iPad 2. We'd add that Analysys' figures might not tell the whole story, though: China is well-known for its thriving shanzhai market, where legions of KIRFs and very small (usually Android-based) brands likely slip under an analyst group's radar. That said, it's still an illustration of how Apple's influence in tablets is a distinct reversal of its much smaller smartphone share, even in a nation that's a hotbed of Android activity.
Early estimates say new iPad cuts Apple's profit margins
These estimates are always to be taken with a grain of salt but, if UBM TechInsights is to be believed, Apple is cutting into its precious profit margins to keep the price of the iPad flat. According to the research firm, the total cost of components in the 16GB 4G model is around $310 -- not including assembly and shipping. With a final price of $629, Cupertino is pulling in about a 51 percent profit, a sizable drop from the estimated 56 percent profit margin on the similarly specced iPad 2 at launch. A large chunk of that increased cost of production is made up by the new retina display, which is estimated to cost around $70, and the LTE chipset, which UBM priced at $21. In contrast, current pricing on the panel in the iPad 2 and its 3G radio rest at around $50 and $10, respectively. We're sure Tim Cook isn't losing any sleep though, there are plenty of other ways to make up that lost dough -- like selling more iPads.
EU online spending estimated to grow 16 percent, reach €232 billion in 2012
Pardon us Americans as we act surprised, but it turns out that we have one more thing in common with our Euro brethren: a growing number of us dislike shopping in stores. According to Kelkoo estimates, online spending in the European Union is projected to continue its upward trend, which is said to reach somewhere in the neighborhood of €232 billion before year's end. If the estimate holds, this would be a 16 percent increase over the €200 billion raked by e-tailers during 2011, and is naturally assumed to come at the expense of traditional brick and mortar outfits, whose growth is projected to increase by a mere 1.8 percent.The data gathered also suggest there's significant room for expansion, however, as online spending accounted for just 7.8 percent of all EU retail sales in 2011, with the UK, Germany and France being responsible for a whopping 71 percent of that tally. The 16 percent projected growth is a slight decline from 2011, which saw EU online spending grow by 18 percent -- although, Europe's growing habit for click-and-ship continues to outpace the US, which grew by only 12.8 percent in 2011. Now, since you've crammed all these numbers, why not check the funny pages?[Shopping button via Shutterstock]
Apple bucks declining PC shipment trend, according to latest estimates
Apple remains conspicuous by its absence (again) at this year's CES, but preliminary shipment estimates for PCs sold in Q4 2011 show that the company appears to be bucking the generally declining trend. Worldwide shipments dropped 1.4 percent compared to the same period last year, with the US seeing a 5.9 percent decline. The global drop includes an estimated 16.2 percent decrease from HP while Acer battled an 18.4 percent loss in shipments. Staving off any decline, both Lenovo (23 percent) and Asus (20.5 percent) managed an increase. Perhaps unsurprisingly, Mac shipments -- including both desktop and notebook models -- saw a 20.7 percent increase since Q4 2010. Who needs booth babes?
Mac sales climb after launch of OS X Lion and new MacBook Airs
Apple's current quarterly earnings should receive a nice boost from brisk sales of Mac hardware says analysts. This summer increase can be attributed to the July introduction of OS X Lion and new MacBook Air and Mac mini models. The latest NPD report suggests Mac sales may climb 26% year over year, which is six times the growth of the overall PC market. Barclays analyst Ben Reitzes is a bit more conservative with his estimate of 18% year-over-year growth for Mac sales. And, lastly, Piper Jaffray analyst Gene Munster is similarly optimistic about Mac sales. Munster believes enthusiasm for the new hardware and software will help Apple ship 4.5 million Macs this quarter. Based on these estimates, it'll be a good year for the Mac. Mac sales will continue to grow and Apple will gain market share in the PC industry. These glowing figures are a refreshing change from the rest of the PC industry which is slumping.
Apple could ship up to 15 million MacBook Air and Pro units in 2011
While the PC industry struggles, Apple is holding strong with its sales of the MacBook Air and MacBook Pro. According to supply chain estimates, Apple received shipments of 400,000 to 500,000 MacBook Air units in June. This number is expected to hold steady during July and August now that a new and improved MacBook Air model is available. Apple is reportedly confident in its ability to sell notebooks. While other manufacturers are approaching the second half of 2011 conservatively and quietly with very little guidance, Apple is supposedly the only vendor that provided a full shipment forecast. The Cupertino company may have a reason to be so sure of itself. According to Digitimes sources, MacBook sales as a whole could climb as high as 15 million units by the end of the year.
LG slashes sales targets, struggling in the smartphone market
LG has had a rough go of it recently. Its phones haven't exactly wowed reviewers, and even the ones that do impress turn out to have major bugs that send customers running to other manufacturers. In the face of its struggles to keep up with the Joneses, the company has slashed its sales targets for 2011 from 30 million smartphones to 24 million, and overall handset shipments from 150 million to 114. In the first half of the year LG sold just over 10 million smartphones -- by comparison, Samsung put an estimated 19 million such devices in the hands of consumers in Q2 alone. Despite posting its fifth straight quarterly loss there is some cause for optimism -- the loses are getting smaller and, if it ever gets the kinks worked out with the G2x, it'll have a serious competitor for your high-end Android dollar.
iPad held 85% market share in 2010 according to ABI Research
ABI Research's 2010 analysis of the media tablet market reveals the iPad grabbed a respectable 85 percent market share. Trailing far behind the iPad was the Samsung Galaxy Tab with an eight percent market share and the Archos Internet tablets with a mere two percent market share. There three vendors accounted for 95 percent of all media tablets sold in 2010. These figures are not surprising considering Apple's jump on the competition. Launched in early 2010, the iPad kicked off this tablet revolution and other manufacturers have struggled to catch up. According to ABI, tablets will continue to hit retail shelves in large numbers. The market research company predicts manufacturers will ship 40 to 50 million tablets worldwide in 2011. With an increase in the number of Android tablets hitting the market and the debut of a dedicated tablet version of Android, the iPad 2 will finally have some serious competition. Though Android will make inroads into the tablet market, the iPad 2 is expected to keep the #1 spot for the next few years. Hopefully, we will get a glimpse of these industry leading sales figures later today during Apple's earnings conference call.
iPad 2 success will burst the bubble for competing tablet manufacturers
Analyst Mark Moskowitz of J.P. Morgan Research predicts the success of the iPad 2 will cause oversupply problems for competing tablet manufacturers. Moskowitz claims manufacturers looking to compete with the iPad 2 have extremely ambitious build plans that will hurt them in the long run. According to his analysis, tablet makers could build up to 65.1 million tablets in 2011, a number which greatly exceeds his estimate of 47.9 million in unit sales. This enthusiasm to duplicate the iPad's success could lead to an oversupply in tablets and components used to build these tablets. In a worst case scenario, tablet makers may have an oversupply of 51%. Moskowitz claims the iPad 2 will continue to lead the tablet market in 2011, a sentiment echoed in other reports. The J.P. Morgan analyst views the Motorola Xoom and the upcoming HP Touchpad as potential competitors to the iPad, but claims consumers may be "underwhelmed" by the remaining tablet products slated to hit the shelves in 2011.
Nokia smartphone market share shrinks to 31 percent, operating profit takes a beating too
Stephen Elop's first quarterly results as Nokia CEO have just come out, and while the company's still growing, others seem to be speeding ahead of it. Nokia's reporting its converged mobile devices (smartphones, to you and us) reached volumes of 28.3 million during Q4 2010, which is a neat bump from 20.8 million at the same time last year and 26.5 million in the previous quarter. However, in the context of the broader smartphone marketplace, that figure now amounts to only a 31 percent share, according to Nokia's own estimates, which is a major dip relative to its 40 percent slice in Q4 2009 and 38 percent in Q3 2010. Elop's perspective on the matter is as follows: "In Q4 we delivered solid performance across all three of our businesses, and generated outstanding cash flow. Additionally, growth trends in the mobile devices market continue to be encouraging. Yet, Nokia faces some significant challenges in our competitiveness and our execution. In short, the industry changed, and now it's time for Nokia to change faster." When your operating profit goes from €1.47b (€950m net) a year ago to €1.09b (€745m net) this year, the response should indeed be to change and to change fast. Nokia's still not disclosing sales figures of the N8, but given that this was the first full reporting period where the company's Symbian flagship has been on sale, it doesn't seem to have had quite the impact Espoo will have hoped for. Wanna try again with the N9? Update: Nokia's investor relations call has borne a few more interesting tidbits from the new man in charge. Elop is quoted as saying Nokia must "build or join a competitive ecosystem," with the latter verb in that sentence sure to renew discussions of why the Finnish company should / shouldn't switch to an OS such as Android or Windows Phone 7. We still think that'll be the very last resort over in Espoo, but Elop apparently believes Nokia has the brand recognition and operator relationships to make such a move if it wanted to. Which of course it doesn't. Or does it? Let's wait for Nokia's Strategy and Financial Briefing in London on February 11th -- Mr. Elop's expected to be a lot more specific about his company's roadmap going forward on that day.
ComScore: Android jumps ahead of iOS in total US smartphone subscribers
We've seen plenty of data to show that Android is the hottest-selling smartphone OS among US buyers today, but now we have a stat point to show that it's doing pretty well in cumulative terms as well. According to ComScore's latest estimates, Android had 26 percent of all US smartphone subscribers in the quarter ending November 2010, bettering Apple's iPhone for the first time. The major victim of Android's ascendancy has actually been RIM's BlackBerry, whose lead at the top contracted by 4.1 percentage points (nearly 11 percent less than the share it had in the previous quarter). Guess those Verizon iPhones and dual-core BBs had better start arriving pretty soon.
iSuppli: Apple to sell 120 million iPads by 2012
Many analysts were disappointed when Apple announced 4.2 million iPads sold in Q4 during the conference call yesterday. The consensus -- or hope -- among many on Wall Street was a 5m+ iPad quarter. But if iSuppli's report today is any indication, the Wall Street boys have nothing to worry about when it comes to future iPad sales. iSuppli states that due to increasing component availability (a lack of which, they suggest, is the only thing that kept Apple from selling more iPads), Apple is set to sell a total of 13.8 million units in 2010, up from 12.9 million units. For 2011, iSuppli has raised total iPad sales estimates from 36.5 million to 43.7 million. It gets even better for the tablet maker in 2012, when iSuppli estimates Apple will sell 63.3 million units, up from their original estimate of 50.4 million. If iSuppli's estimates are correct, that means that by the end of 2012 -- just 2 years and 9 month since the iPad went on sale -- Apple will have sold 120 million of them. Now that's a lot of iPads. The increased forecasts are due to greater than expected interest in the iPad from business and education institutions, and also due to the fact that the iPad is now available in more retail outlets like Amazon, Verizon stores, Target, and Walmart.
Analyst: Apple producing more iPads
Analyst Katy Huberty from Morgan Stanley tells All Things D that she believes Apple is ramping up production on the iPad, aiming to build as many as three million a month by the end of this year. That would mean that the company could make 36 million iPads next year, which brings the total close to (but not quite) the whopping 40 million units predicted by her supply chain analysis. Sales estimates for next year started out around 10 million iPads, but have since risen to as high as 42 million units, which would be quite a year for a product that didn't exist before this past April. Currently, says Huberty, Apple is producing about two million iPads a month, and that's brought shipping times on the website down, and helped availability across the board. But the manufacturing process needs to be refined even further, and of course if, as expected earlier next year, the device sees a revision, that may delay things even further. There seems to be one thing most analysts agree on, however: Apple is going to sell a whole lot of iPads in 2011.
Gene Munster: Apple could sell 6.2 million iPads in 2010
Right after the iPad's announcement, Piper Jaffray analyst Gene Munster estimated the device would sell between three and four million units in 2010. Now that two million iPads have been sold in less than 60 days, Munster has revised his estimates upward. He now believes Apple will sell 6.2 million iPads in 2010. It's unlikely sales will exceed this number, but only because Apple can't seem to crank iPads out of the factory fast enough to keep up with demand. According to Munster's study, 74% of US Apple Stores were sold out of the iPad on May 21. International stores are expected to follow the same trend: strong early sales followed by limited availability of stock. For some perspective on the iPad's sales so far, it's worth looking at a Munster sales estimate from December of last year, about a month before the iPad's announcement. Munster then believed the iPad would sell 1.4 million iPads in 2010, at a rate of about 162,000 units per month. Instead, the iPad has far exceeded that 2010 sales estimate after only two months, and Apple has been selling an average of 34,000 iPads per day since its launch. Love it or hate it, there's no denying that the iPad has been a phenomenal success.
