UBS sees record 75M holiday iPhone sales driven by Apple's lower priced models

Investment firm UBS believes Apple sold a record number of iPhones during the just-concluded December quarter, but that fewer customers opted for Apple's high-end models when compared to a year prior, based on new market research.

Citing the latest data from Consumer Intelligence Research Partners, UBS analyst Steven Milunovich predicted on Wednesday that the average selling price of the iPhone was $662 last quarter. If true, that would be a decrease from the $687 iPhone ASP seen in the prior year's December quarter.

Milunovich arrived at his estimate after CIRP found that 67 percent of December U.S. iPhone sales were Apple's latest flagship iPhone 6s and iPhone 6s Plus models. That's a decrease from the December 2014 quarter, when 75 percent of customers were buying the then-flagship iPhone 6 and iPhone 6 Plus.

The CIRP data suggests that iPhone demand itself has not slowed, but the mix of models appealing to customers has changed. If Apple did reach UBS's 75-million-unit prediction, it would eke past the 74.5 million units Apple shipped in the same quarter a year ago, setting a new all-time record.

Milunovich doesn't think Apple's December 2015 quarter will help the stock in the short-term. But he's also convinced that investors are simply too bearish on Apple's longer-term prospects.

"Consequently, we are inclined to take our short-term lumps and maintain the Buy rating given a solid franchise," he wrote, maintaining a 12-month price target of $130.

32 Comments

lkrupp 10521 comments · 19 Years

About 8 years ago

Unfortunately these results will now mean nothing in terms of AAPL. Analysts are worried about the upcoming next quarter in which they predict doom and gloom for iPhone sales. Supplier checks prove it don’t you know.

jonl 210 comments · 11 Years

If they are right, iPhone revenues will be down YoY, perhaps more than the lower ASPs indicate due to possibly lower margins on the older phones. The unfavorable mix would explain some of Cirrus's miss, as they were no doubt expecting to benefit more from the additional amp they added in the iPhones 6s. Though Skyworks hasn't warned, this will likely affect them a little, too, as they were said to have added content in the new phones.

teejay2012 406 comments · 12 Years

trumptman 15719 comments · 23 Years

Could it really be that Apple is doing anything wrong?

I think people aren't worried about how Apple is performing. I think people are questioning how much profit can be made in a market when the world is likely going to be experiencing a very strong economic downturn. The indicators are there across several markets. For Apple to take 90+% of all the profits in a market, there has to be a healthy market period. China is sick and the world is catching the cold.

rwes 200 comments · 11 Years

sog35 said:

lkrupp said:

Unfortunately these results will now mean nothing in terms of AAPL. Analysts are worried about the upcoming next quarter in which they predict doom and gloom for iPhone sales. Supplier checks prove it don’t you know.

The same crap.
Different quarter.

This is why Apple needs to refute supply chain bullshit when its first reported.
IMO, Apple would be at $110-$115 right now if Cook refuted the supply chain rumors in early December.
It would be still down 15% from its highs because of the broad market decline but no way would it be down 30% like it is now.

This is all about controlling the narrative. When the first supply chain rumors began in early December, Cook could have simply tweeted this to kill of these rumors:

"We are on pace for our best holiday quarter EVER!"
"Remember supply chain checks are inconclusive at best and misleading at worst."
"Remember those supply chain rumors in 2012? 2013? 2014? How did that work out?"

Or simply say nothing, and buyback more of the company at a lower cost? And sell, obviously, when higher, if/when those relying on supply chain checks are proven wrong?