Analyst: No Summer Sales Doldrums for Apple This Year
Since the release of the iPhone 4S in 2011, Apple (NASDAQ:AAPL) has typically refreshed its products in the fall. As a result, the Cupertino-based company usually sees a fairly significant drop off in sales during the summer, as many consumers hold off on buying new Apple products until the latest models are released. However, the iPhone maker may skip the seasonal sales doldrums this year. According to the latest data from Cantor Fitzgerald’s Apple Barometer, sales for Apple’s suppliers were unusually high last month, reports TheStreet. The firm’s Apple Barometer monitors the sales of various Taiwan-based suppliers that generate the majority of their sales revenue from Apple. As such, the Apple Barometer provides an early indication of the amount of demand for the company’s products.
“Preliminary May sales (98 percent of sales have been reported) for the companies in our Apple Barometer have been reported and were stronger than typical seasonality,” wrote Cantor Fitzgerald analyst Brian White in a note obtained by TheStreet. “Sales in May rose by approximately 6-7 percent MoM [month-over-month] and were above the average increase of 2 percent over the past nine years.”
Based on May’s results, Apple Barometer sales are expected to sequentially rise by 18 to 20 percent in the second calendar quarter of 2014. According to White, the average sequential increase seen over the past nine years has been 10 percent. Although White still expects a sequential dip in the third-quarter, he believes the drop off in sales will be less impactful than what has been seen in previous years.
White is currently attending the Computex trade show in Taipei, Taiwan and his most recent note about strong supplier sales follows a previous note that focused on the Apple’s rumored wearable tech product. According to supply chain sources White consulted in Taiwan, at least one company will begin manufacturing an iWatch component sometime this month. Based on his analysis of previous product ramps, White predicted that the iWatch would be unveiled in September. White also noted that the iWatch would likely launch at the same time as Apple’s iPhone 6, since the wrist-worn device is likely intended to operate in tandem with the new iPhone. White maintains a “Buy” rating and a $777 price target on Apple shares.
Apple’s share price has risen over 2.3 percent since the company kicked off its Worldwide Developers Conference on Monday. The stock went as high as $651.26 in midday trading on Friday, a 52-week record and the highest it has been since the $700-plus peak it reached in September of 2012. Friday is the last day of trading before Apple undergoes a seven-for-one stock split. Although the split doesn’t change the company’s overall market value, split-adjusted Apple shares will be available for one-seventh the current value — around $90 — starting on Monday.
Follow Nathanael on Twitter (@ArnoldEtan_WSCS)