Munster: Apple Products Are Hot This Season


Piper Jaffray analysts Gene Munster and Douglas Clinton examined the impact of the Black Friday weekend shopping rush on Apple’s (NASDAQ:AAPL) December quarter in a recent note to investors. Overall, the analysts found strong consumer interest in Apple’s products over the first major shopping weekend of the holiday season. In particular, the analysts found “better-than-expected interest in the iPad Mini Retina.”

They noted that most of the versions and capacities of the iPad mini with Retina display sold out early in the day at Mall of America. According to their brief observation of traffic at Mall of America, they estimated that store traffic was up 9 percent over last year. Munster and Clinton also found that their analysis of Twitter (NYSE:TWTR) trends provided further proof of strong consumer interest in Apple’s products. The analysts looked at over 90,000 tweets with the “#BlackFriday” or “#CyberMonday” hashtag and found that the iPad and iPhone were some of the most mentioned products. Apple’s iPad was the top mentioned product for “#BlackFriday,” mentioned 1 percent of the time. Similarly, the iPhone was the most mentioned product for “#CyberMonday,” mentioned 0.31 percent of the time.

Overall, Apple was mentioned 0.92 percent of the time for “#BlackFriday” and 0.23 percent of the time for “#CyberMonday.” This contrasts with Samsung’s (SSNLF.PK) popularity at 0.20 percent for “#BlackFriday” and 0.29 percent for “#CyberMonday.” Android was also lagging Apple at 0.11 percent and 0.19 percent, respectively.

This year, the Apple Store offered gift cards in lieu of its traditional Black Friday product discounts. Although it is not clear how this may have affected sales at the Apple Store, Munster and Clinton noted that, “Comparing this year’s gift card dollar offer to the prior discounts, it appears Apple was incentivizing fairly equally.” However, Apple resellers continued their traditional strategy of luring customers with product discounts. The analysts noted that Best Buy (NYSE:BBY) offered the iPad Air with a $50 discount and the iPad 2 with a $100 discount. Best Buy’s MacBooks were also discounted by $150 to $200, depending on the model.

Finally, the analysts noted that the supply of the latest iPad mini model is “generally tight at retail in the U.S.” Munster and Clinton also pointed out that the iPad mini with Retina display still had “5-10 day online lead times in 3 countries.” Despite possible supply constraints, the analysts believe that their initial forecast of 24.5 million iPad units shipped in the December quarter was “slightly conservative with upside limited by supply.”

Piper Jaffray has an “Overweight” rating and a $640 price target on Apple shares. Here’s how Apple has traded over the past five sessions.


Follow Nathanael on Twitter (@ArnoldEtan_WSCS)

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