Apple Business Recap: iPhone 4S Sell Outs Abound
AAPL (NASDAQ:AAPL) Falls As Markets Plummet
Markets are exploding around the world. Yields in Italy and surging well beyond 7%. Spreads are blowing out in France and Spain. The Dow is off over 250 points. Follow live commentary today here. Shares of AAPL are off about 2% with the rest of tech. Catalysts include iPhone upgrade cycles (see below); update to the iPad in early 2012; continued market share growth of the Mac business line; penetration in China and emerging markets; the evolution and potential reconstruction of Apple TV; and platforms such as mobile advertising (iAd), books / publishing, mapping and social (Ping). Shares of Apple trade at 9.0x Enterprise Value / Trailing Twelve Months Free Cash Flow(including long-term marketable securities).
Oh No! Apple Said To Have Cut Fourth Quarter iPhone 4S Supply Chain Orders (Business Insider)
Henry Blodget at Business Insider is covering a story out of Taiwan that Apple is reducing component orders from Asia suppliers because of sales and production problems with the iPhone 4S. The report runs counter to the many anecdotal reports of a spectacular launch for the 4S. Importantly, it cites component shortages as a cause, which is more plausible than a lack of demand. Last quarter, there were a couple of vague reports like this, followed by a surprising shortfall in iPhone sales in Apple September-quarter results.
Is Apple Going After Google Maps? (MacRumors)
Most likely. Apple is rumored to have acquired 3D mapping firm C3 Technologies. While much of the early demos showed C3’s ability to create realistic looking 3D maps, the company had also been working on both street view and interior views prior to their acquisition. Obviously, these views are extremely resource intensive. However, if accomplished, it could take on Google Map’s technology which presently powers iOS Maps.
Apple To Command 75% Tablet Market Share In Calendar 2011 (All Things Digital)
According to Canaccord Genuity analyst T. Michael Walkley, Apple should sell about 14 million iPads during the holiday quarter. That’s a significant increase over last quarter when Apple sold 11.12 million units. He believes “Apple’s sell-through share of the tablet market will exceed 75 percent during C2011.” Looking to next year, about 58.8 million iPads are forecast for 2012, representing 57% of the global tablet market of 102.3 million units. In terms of the iPhone, Walkley has a great graph that shows Apple’s 4% phone market share yet commands 52% of the profits. Crazy.
Apple Selling Out Of The iPhone 4S Daily At 85-90% Of U.S. Retail Stores (Barron’s)
Citing channel checks, Deutsche Bank analyst Chris Whitmore says that iPhone 4S “demand continues to track very strongly…experiencing daily stock outs at ~85-90% of the ~30 retail stores we called.” Lead times are around two weeks in the U.S. and one to two weeks in the 22 other countries (where the device went on sale on October 28). Whitmore expects Apple to sell 28 million units during the quarter.
Sales In South Korean For The iPhone 4S Beats Samsung And The iPhone 4 (The Chosunilbo)
South Korean sales for Apple’s new iPhone 4S reached 200,000 units in one day as mobile carriers KT and SK telecom opened pre-orders for the device. The record demand for Apple’s newest handset outpaced pre-orders for the previous generation iPhone 4 in the region, which totaled 130,000 in August 2010.
It also beats sales of Samsung’s Galaxy S II, which tallied only 120,000 over three days in its native country.
China Unicom Gets Ready For The iPhone 4S (9to5Mac)
China Unicom, the world’s third-largest carrier and currently Apple’s sole iPhone partner in the China, has dropped both the 16GB and 32GB iPhone 4 model and will be introducing the 8GB iPhone 4 later this month. The move comes in anticipation of the iPhone 4S launch due by year’s end. The iPhone 4S is currently pending regulatory approval. The move would indicate that China Unicom will focus on the new iPhone 4S and carry the 8GB iPhone 4 as an inexpensive entry-level handset.
The Smartphone War Is Far From Over (Asymco)
Breaking down comScore data, Horace Dediu of Asymco shows a compelling chart of the U.S. mobile phone landscape. It highlights a few key points:
- The untapped opportunity remains huge
- There is opportunity for newcomers (Microsoft)
- Android has grown and is growing at an incredible pace
- Apple should be worried, but it’s far from over
The data doesn’t take into account the iPhone 4S nor the free iPhone 3GS. Next quarter will be telling.
Eric Schmidt Calls Siri A Competitive Threat (ZDNet)
Google Chairman Eric Schmidt, in another round with U.S. senators over Google’s alleged anti-competitiveness, says that Google is threatened by Apple’s Siri. While other challenges include Facebook’s integration of Bing and lose of real-time Twitter search, Siri appears to make Google worry the most as it is a “significant development” in mobile search. Whether those statements were to appease regulators or he actually believes it is another story; likely the former as I would have to agree. And Siri only adds fuel to the iMessage fire.
More Enterprise Use Cases For The iPad: Walgreens (PadGadget)
Walgreens showcased a range of ideas and trial programs to innovate healthcare at their drugstore chains, including a plan to give iPads to store staff to access a range of information from physician ratings to government databases. The new plan goes beyond customer service. Walgreens competes for reimbursement dollars just like doctor’s offices and hospitals do. The more actively pharmacists participate in customer care, the more Walgreens can claim in insurance reimbursements.
Heather Leonard is the Apple analyst at Business Insider.