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Analyst Says Perhaps Millions of iPhone 5 Pre-Orders Still in Transit, Not Included in Announced Sales

Monday September 24, 2012 7:08 am PDT by Eric Slivka
Earlier today, Apple officially announced sales of over five million iPhone 5 units during its launch weekend, easily topping the iPhone 4S debut from last year but falling short of many analysts' expectations.

ISI Group analyst Brian Marshall theorizes that the apparent shortfall compared to expectations may stem from Apple's rapid sellout of its own launch day pre-orders, which occurred in just about an hour. Apple announced two million pre-orders for the iPhone 5 in the first 24 hours of availability, a figure that was used by analysts to predict blockbuster opening weekend sales of 6-10 million units.

Marshall notes that many of those first-day pre-orders, as well as ones made after that date, have yet to be delivered, and thus Apple can not yet count them as sold. A brief "clarification" from Marshall reads:
[R]ecall the 5mil+ iPhone 5 reported sales only takes into consideration: 1) what was sold into partners (e.g., retail outlets, carriers, etc.), 2) sold in AAPL retail stores, and 3) direct to customers only if they signed for the device. Importantly, this doesn't take into consideration units in delivery direct to customers (i.e., AAPL must have signature of acceptance by customer before it is counted as a sale) and we estimate units in transit could be in the millions currently.
Some of those "late" iPhone 5 pre-orders through Apple that had been quoted delivery in early October have already begun shipping with estimated delivery dates of September 27. Those units will not, however, be counted as sales by Apple until they are delivered.

Update 7:13 AM: Piper Jaffray analyst Gene Munster, who was responsible for the widely cited 6-10 million unit estimate, has released his own note expressing similar sentiments. He believes that up to a million iPhone 5 pre-orders remain in transit and notes that in-store supply was tighter for the iPhone 5 than for the iPhone 4S, holding back iPhone 5 sales numbers.
We believe there are two factors that negatively impacted the number. First, our sales expectation assumed that Apple would include all phones pre-ordered online. We believe that this may have been up to 1 million additional units as units pre-ordered after the middle of the first day were projected to be available in October. Second, we noted 1.25 days of Apple Retail inventory compared to 2.5 days during the 4S launch. Our 8 million estimate assumed full weekend availability and the counting of all online pre-orders. We believe that if supply were not a constraint and Apple included all pre-orders, the launch weekend number would have been closer to 7-8 million, assuming ~1 million October pre-order sales and an additional 1-2 million units at retail.


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[ 103 comments ]


Top Rated Comments

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striker33
75 months ago
Hi. I'm an analyst. My initial figures were completely wrong, and as such, I am now correcting my initial prediction with a prediction.

I love being paid to tell lies.
Rating: 16 Votes
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Reddmanz
75 months ago
Interesting they aren't trying to claim these units in the announcement. I bet a few other companies might...
Rating: 12 Votes
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edry.hilario
75 months ago
please lets move on to something else now
Rating: 7 Votes
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Zunjine
75 months ago

please lets move on to something else now


Who's stopping you? ;)
Rating: 5 Votes
Avatar
GroundLoop
75 months ago
must...keep...stake...in...apple...growing...

sounds like someone who is not too happy with his paper loss today...

GL
Rating: 4 Votes
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gmanist1000
75 months ago
Just incredible. The thing that really got me was 100 million iOS 6 upgrades. WOW.
Rating: 4 Votes
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bartonlynch
75 months ago
It's funny how Apple only counts devices as sold if they are in customers' hands, while its competitors count "shipped" devices, as in those rotting on the shelves.
Rating: 4 Votes
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bbplayer5
75 months ago
Android fanboy or not, this is impressive. Glad my iPhone 5 only had 2 tiny blemishes... Sharpie fixed them right up.
Rating: 4 Votes
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Dave-Z
75 months ago

Hi. I'm an analyst. My initial figures were completely wrong, and as such, I am now correcting my initial prediction with a prediction.


Analysts and meteorologists: the two career choices where one does not have to be at all right to be employed. :rolleyes:
Rating: 3 Votes
Avatar
gatearray
75 months ago

This story doesn't make any sense. Since when does any company not count sales until they are delivered? Credit cards are charged when orders are shipped. Do we really think that they are tracking each shipment and not counting the sale until its delivered? I'm not buying it. These analysts are just trying to come up with some way to cover their butts for being so far off on the numbers.


Agreed, this sounds like some really pathetic logic on the Munster's part, in my opinion he hasn't done anything worth while since that TV show in the sixties, but I digress. :)

Look, it's a marathon, not a sprint. Did Apple want to announce 8 million iPhones sold this weekend, or were they content with 5 million? All they want to do is exceed last year's number, and leave room for the 5S to exceed that next year. A million more sales than the 4S was the plan, just as 6 million sales of next year's 5S is the plan.

Simple enough, but I guess these dumbass analysts don't really understand business.
Rating: 3 Votes

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