Apple sold 9mn+ new iPhones in the first weekend, higher than last September’s 5mn+. Although Apple added China (2mn+ units of iPhone 5 were sold in the first weekend last December) and NTT DoCoMo in the initial launch this year, the 9mn+ shipments were still higher than consensus of 5-8mn, thus being viewed as a positive surprise.
Generally new iPhones have been completely sold out during the launch weekend. This time while the 5s is sold out, the 5c is not. We est that of the 9M+ number, 4M were 5s and 5M were 5c with half of those going into inventory. Whatever was in the stores
was generally sold out. While there was likely some in-transit inventory. We believe there are 2.5M of 5c units sitting on shelves in the launch countries. We think a more apples-to-apples comparison would be comparing our estimate of 6.5M to consensus expectations of ~6M and last year’s 5M+. While 6.5M is still better than expectations and likely reflects larger initial iPhone 5s stockpile.
iPhone Sales impact on AAC
There were expectations that AAC would be replaced. AAC would lose share from iPhone 5 to iPhone 5c and 5s, there have been expectations for ASP [Average Selling Price] improvement. However, teardown pictures available on the Internet suggest that both the speaker boxes and receivers in iPhone 5c and 5s are similar to iPhone 5, implying limited ASP improvement, if any.
Blackberry’s August quarter miss and plan to shrink its smartphone portfolio as an incremental negative to AAC. Our negative view on AAC remains due to a saturated high-end smartphone market, increasing competition and mounting margin pressure.