Analyst: Upgrades Fuel iPad Air Launch Sales
Cantor Fitzgerald analyst Brian White shared his final thoughts on Apple’s (NASDAQ:AAPL) iPad Air launch weekend ahead of the company’s expected release of its iPad sales numbers later today. White’s analysis focused on the results of a survey of iPad buyers at several New York City Apple Stores, as well as the availability of the new iPad at various stores in the U.S. and China.
According to Cantor Fitzgerald’s survey, 73 percent of respondents who bought the iPad Air were upgrading from an older iPad model. Fourteen percent were replacing a non-iPad tablet with the iPad Air and 13 percent were purchasing a tablet for the first time. Most of the upgrade purchases — 31 percent — came from iPad 2 owners. Eighteen percent came from the iPad 3 and 16 percent came from the original iPad.
Besides determining that the majority of iPad Air sales appeared to be coming from customers looking to upgrade, Cantor Fitzgerald’s survey also found that the 16GB capacity model and the silver color option were the most popular choices for iPad Air buyers. Sixty percent of surveyed respondents reported buying the 16GB iPad Air and 64 percent preferred the silver color option.
Although White found that certain capacities or carrier models of the iPad Air were sold out at some Apple Store locations in the U.S., there didn’t appear to be a complete inventory sell-out like there was for the iPad mini last year. On the other hand, the 128GB iPad Air was found to be unavailable at several locations. However, the analyst believes that this was likely due to an initial low supply rather than a higher demand for that particular model. White also monitored the iPad Air inventory levels at stores in China and Hong Kong. The Hong Kong Apple Store website indicated that the iPad Air was currently unavailable, while the China Apple Store website showed estimated shipping times between 5 to 10 business days for almost all capacities and colors except for the 64GB space gray iPad Air.
White also revealed that a surprising number of Apple Store customers surveyed indicated that they were purchasing the original iPad mini. Apple recently lowered the price of the 16GB Wi-Fi version of the original iPad mini from $329 to $299. This may indicate that there is a greater demand for Apple’s upcoming iPad mini with Retina display than there is for the new 9.7-inch iPad Air. This would be in line with Piper Jaffray analyst Gene Munster’s prediction that “60-65 percent of total iPad sales” will come from the 7.9-inch version of Apple’s tablet.
White maintained his “Buy” rating and $777 price target on Apple stock. He noted that his price target is “based on nearly 14x our CY:14 pro forma EPS estimate (adjusted for interest income/expense), plus Apple’s net cash per share of $142.77.” Here’s how Apple has traded over the past week.
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