Morgan Stanley’s Apple analyst, Katy Huberty, tracks smartphone sell through using web search analytics (called AlphaWise). Her data through the end of May indicates that Apple’s iPhone is having another strong quarter with an estimated demand of 39 million iPhone’s vs. her estimate of 34 million and consensus of 35 million.
At 39 million iPhones would show an increase of 25% year over year vs. 17% in the March quarter and would only be down 11% quarter over quarter vs. last years 17% sequential decline (and 26% two years ago). An extra 5 million iPhones could add $2.8 billion in revenue and about $0.15 to EPS (consensus is at $1.22 post-split).
Huberty believes that promotions from Apple, retailers and carriers are driving strong demand. Apple started selling an 8GB iPhone 5c in mid-March and has been offering $99 and $199 trade-ins for the iPhone 4 and 4s since early May. U.S. carriers have also been offering deals and promotions since early 2014.
AlphaWise has been a good indicator of iPhone demand
Over the past five quarters Huberty’s AlphaWise survey has been within 9% of Apple’s actual iPhone sales and in four of them has been below them by a range of 1% to 9%. In the September 2013 quarter it did overshoot sales by 9% or 3.5 million iPhones. Note that these are calendar quarters in the table.
From a geographical perspective growth has accelerated quarter over quarter in the U.S., Europe and Brazil while roughly consistent in China and Japan. It is interesting to see that her data shows Japan being consistent since some of the data I track from BCN shows iPhone growth slowing.
Samsung’s Galaxy tracking below expectations
Huberty’s AlphaWise survey has Samsung’s Galaxy family coming in at 41 million units or down 1% year over year with the weakness in lower priced and legacy models. The Galaxy S5 is in-line with expectations at 20 million and the company should ship about 81 million smartphones in the quarter, up 4% year over year.