Apple IPhone SE On Track To Hit Sales Of 9 Million Units This Year

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Source: Alex Cho, Fiksu, BofAML

I borrow a research study from Bank of America Merrill Lynch (BofAML) to determine the global installed base by the May cut-off point, and also use Fiksu data points on iOS percentage usage to determine the number of sales. When utilizing the base expansion rate with the percentage of iPhone SE users we can arrive at a close enough approximation to hang our hats on. The above graphic is in terms of cumulative sales through the duration of the current fiscal year.

Of course, there are variances to this calculation because Apple has 13-days of inventory. Apple recognizes sales directly from wholesale contracts rather than direct retail in the majority of instances (excluding Apple retail stores). However, inventory sitting in the sales channel is roughly 5 to 6 weeks according to the prior earnings conference call. So we can probably attach another 5 to 6 weeks of unit sales to arrive at Apple’s reported figure as opposed to the number of iPhone’s that have exited the channel to the end user. Also, Apple’s reported figures in September gets cut-off by the 26th which reduces our unit assumption by another four days. So, at the low-end I’m anticipating roughly 9 million and at the high-end 10.76 million units in FY’16. I use the low-end figure to estimate the impact on ASPs.

This figure more or less corresponds with much of the sell-side commentary going into the product launch announcement. While it’s not clear if other analysts have used a similar forecast method to arrive at this conclusion, I believe that with a blend of historical adoption data and reasonable penetration assumptions. We arrive at the conclusion that iPhone SE won’t be the biggest needle mover assuming Apple sells 212.78 million units this year. The consensus estimate hovers at around 215 to 220 million units, so I’m a little more conservative here.

How will iPhone SE impact gross margins?

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Disclosure: I do not hold any positions in the stocks mentioned in this post and don't intend to initiate a position in the next 72 hours. I am not an ...

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