3 Analysts Weigh in on Apple’s Record iPhone Pre-Orders



Apple has announced a record number of pre-orders for its soon-to-be-released iPhone 6 and iPhone 6 Plus. In a press release issued on Monday, Apple revealed that over four million units of the next-generation iPhones have been requested in the first 24 hours. Apple also confirmed that the demand for the new iPhones exceeded the available pre-order supply, an issue that many customers and major carriers had already reported over the past weekend. However, this doesn’t mean that store shelves will be empty when the devices officially launch next week. As noted by Apple, “additional supply of iPhone 6 and iPhone 6 Plus will be available to walk-in customers on Friday, September 19 at 8:00 a.m. local time at Apple retail stores,” as well as “AT&T, Sprint, T-Mobile, Verizon Wireless, additional carriers, and select Apple Authorized Resellers.”

While Apple noted that this was a record for first day pre-orders, it is unknown how this year’s pre-orders compare to last year’s, since there were no pre-order numbers released for the iPhone 5S. However, Apple did reveal that pre-orders for the iPhone 5 topped two million in 2012. In a note issued to investors on Monday, Wells Fargo analyst Maynard Um pointed out that the iPhone 5 went on to sell five million units over the launch weekend. “Assuming preorders are similar to the 40 percent of first weekend sales for the iPhone 5, this would imply iPhone 6/6Plus first weekend sales could be around 10mn,” wrote Um.

Um also noted that the number of launch countries for the iPhone 5 and iPhone 6/iPhone 6 Plus is the same except for the addition of Puerto Rico this year. Although China was included in the initial launch weekend for last year’s iPhone 5C/iPhone 5S, the country was noticeably absent from this year’s list of the ten initial launch markets. China was also not mentioned in Apple’s list of the 22 additional countries that would receive the new iPhones on September 26. Although Apple has declined to comment on the delayed launch in China, unnamed executives from the country’s three major carriers told The New York Times that it appeared that the new iPhones had not yet received approval from Chinese regulators.

iPhone 6 and iPhone 6 Plus display sizes

Source: Apple.com

Despite the unexpected delay in the devices’ release in China, Um predicted that Apple would achieve a total of “low teens million sales for its first weekend,” assuming that “Apple has more inventory on hand versus the 5 launch.” Um maintained a “Market Perform” rating and a target price range of $89 to $99 on Apple shares.

Cantor Fitzgerald analyst Brian White also issued a note to investors on Monday that said that the “insatiable appetite for the iPhone 6 Plus” was evidence that the company is beginning a new phase of growth. “Similar to ‘super cycles’ that began in 2001 (iPod), 2007 (iPhone), and 2010 (iPad), we believe Apple is in the midst of another ‘super cycle’ that begins with the rapidly growing ‘phablet’ market via the iPhone 6 Plus and extends into the wearable category in early 2015 with Apple Watch,” wrote White. White reiterated his “Buy” rating and $123 price target on Apple shares.

Although White did not provide a first weekend sales estimate in his latest research note, he has previously expressed concern about supply constraints with the iPhone 6 and “severe” supply constraints with the iPhone 6 Plus due to a late supply chain ramp up. The almost complete lack of iPhone 6 Plus component leaks appears to back up White’s claims of a severely limited supply. It should also be noted that, although Apple reported that many of its iPhone pre-orders will be delivered in October, White’s own research over the weekend found that iPhone 6 Plus delivery times from major carrier partner AT&T stretched into November.

Apple iPhone 6

Source: Apple.com

Finally, Apple-focused Piper Jaffray analyst Gene Munster offered his take on the company’s record iPhone pre-orders in a research note issued on Monday. Like Um, Munster noted that the iPhone 5 pre-order numbers from 2012 offer the only available comparable. “If we assume an up 25 percent y/y number for the iPhone 6/6 Plus vs the iPhone 5 (not the 5S/5C), it would imply a number close to our prior 6.5 million unit iPhone 6/6 Plus pre-order estimate,” wrote Munster. “We remain comfortable with our 6.5 million unit estimate for opening weekend sales.”

It should be pointed out that Munster has previously cautioned investors to “avoid the opening weekend numbers given difficult comps from the iPhone 5C channel fill.” He believes the “true” opening weekend launch comparable is around 5.5 million iPhone 5S units. Munster maintained an “Overweight” rating and a $120 price target on Apple shares.

While Apple’s record pre-orders suggest that the company will have very strong first weekend sales, it remains to be seen if the absence of a launch in China or any possible supply constraints on the iPhone 6 Plus will hamper what may be the biggest iPhone launch in the company’s history. It also remains to be seen if last year’s first weekend sales of nine million can be surpassed despite the channel fill issue that may have caused 2013’s opening weekend iPhone sales numbers to be unusually high. The accuracy of these three analysts’ predictions will be revealed on Monday, September 22, when Apple is expected to announce its first weekend sales numbers.

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)

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