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3Q iPod Sales Not Meeting Expectations?

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Apr 12, 2001
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A recent Piper Jaffray report reported by Forbes.com claims that Apple may ship 8 million iPods this quarter, down from Wallstreet expectations of 8.6 million units.

The analyst arrived at his new 8-million figure by looking at the typical percentage of iPods shipped in past June quarters and measuring the sequential and year-over-year growth rates. He then averaged the two estimates from his sequential and year-over-year growth numbers and came up with 8.9 million iPods for the quarter.

In the previous quarters, however, Munster has found that extrapolation of the first month data typically overshot the actual reported iPod unit number for the quarter, so he removed 10% from the initial unit estimate to arrive at 8 million.

The report claims that iPods have not been moving as fast as expected in April. However, this is likely to change with "Grads and Dads" buying in May and June likely to buoy iPod sales.
 

longofest

Editor emeritus
Jul 10, 2003
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To pre-empt any "why is this page 2" comments... Wallstreet is notoriously fickle, so Wallstreet expectations are not necessarily a good indication of how Apple is doing.
 
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longofest

Editor emeritus
Jul 10, 2003
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iGary said:
You guys are like three days behind MacDaily News...kind of embarrasing, honestly....this....the Dell Stores....

3 days??? That's a little over-kill. The story broke yesterday. I didn't post it until today because I didn't really think it was newsworthy. It gained a lot of attention, so I posted it on page2.

If you look at the way he predicted his 8 million number, it is really, really fuzzy math.
 
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iGary

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May 26, 2004
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longofest said:
3 days??? That's a little over-kill. The story broke yesterday. I didn't post it until today because I didn't really think it was newsworthy. It gained a lot of attention, so I posted it on page2.

If you look at the way he predicted his 8 million number, it is really, really fuzzy math.

OK, yesterday.

Still...old. :)
 
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mozmac

macrumors 6502
Apr 28, 2005
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Austin, TX
longofest said:
3 days??? That's a little over-kill. The story broke yesterday. I didn't post it until today because I didn't really think it was newsworthy. It gained a lot of attention, so I posted it on page2.

If you look at the way he predicted his 8 million number, it is really, really fuzzy math.

I'm with you, I don't think this is that newsworthy. People can expect what they want, however, usually they are let down.
 
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dashiel

macrumors 6502a
Nov 12, 2003
876
0
iPod's not meeting expectations is the latter day "beleaguered apple computer".

at least the last 3 quarters in a row analysts have been under (way under in some instances) on their ipod estimates. the simple fact is i, and most apple die-hards, have a better idea of apple's financial standing than the analysts do.

unfortunately wall street is perhaps the worst offender of the "perception is reality" meme. analysts say something stupid, but theoretically reasonable, the punters who glom on to what's "hot" artificially inflate/deflate the price. anytime the stock dips below $60 i pick up some more.

i'd like to think apple is the exception and that for the most part analysts know what they're talking about, but i doubt it.
 
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bigandy

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Apr 30, 2004
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umm, i think 8 million is still pretty reasonable... i mean, what's 600,000 iPods to apple these days?

methinks some people on wallstreet are jus trying to get the share price down so they can buy themselves some stock! :rolleyes:
 
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Doctor Q

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Staff member
Sep 19, 2002
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He decided to remove some, picked 10%, and it came out smaller than expected. That doesn't sound very precise. Reading tea leaves might turn out to be almost as accurate.
 
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WildCowboy

Administrator/Editor
Staff member
Jan 20, 2005
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Piper Jaffray has been pretty optimistic in recent years when it comes to Apple. Under those circumstances alone, I'd normally put *some* value in a more negative outlook from them.

But they got things quite wrong in November when they scaled back iPod estimates for that quarter to 9 million units, the lowest of any of the analyst firms modeling Apple's performance. Apple went on to sell 14 million iPods that quarter...oops.

Analysts don't know anything...that's why monkeys do a better job of picking stocks than analysts.
 
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MacAficionado

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Oct 5, 2002
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It's all good! This is expected. Apple will have to come up with new capabilities for the iPod to keep the attention of the market, but the focus I think is on Mac sales. With the new Macbook, I think will more than make up for whatever iPod sales slowdown Apple suffers.
And it is not even Back to school season. This summer we will know if the switch to Intel is going to pay off. Along with the new Macbook, we will see revised versions of the iPod, hopefully a business spinoff of the iPod and Apple will be just fine.:)
 
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081440

macrumors regular
Mar 14, 2006
155
3
New Jersey
If the numbers are correct - I'm not surprised.

Apple hasn't released any new versions for a long time now (in iPod terms) and therefore there is no reason for the people to buy a replacment.

Pretty much everybody that I know who will ever buy an iPod already owns one...or two...or three And I have a feeling that more than 50% of the population that will get one already has one However when a new model comes out most of these same people buy the new one withing a month or two. (For some reason they cannot stand not having an older model like the iPod mini) :confused:

So I think these are the costomers (at least in the US) that Apple is now trying to attract, and without any new products there is no reason to buy.
 
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corywoolf

macrumors 65816
Jun 28, 2004
1,352
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081440 said:
If the numbers are correct - I'm not surprised.

Apple hasn't released any new versions for a long time now (in iPod terms) and therefore there is no reason for the people to buy a replacment.

Pretty much everybody that I know who will ever buy an iPod already owns one...or two...or three And I have a feeling that more than 50% of the population that will get one already has one However when a new model comes out most of these same people buy the new one withing a month or two. (For some reason they cannot stand not having an older model like the iPod mini) :confused:

So I think these are the costomers (at least in the US) that Apple is now trying to attract, and without any new products there is no reason to buy.

I was thinking the same thing. It's Apple's fault.
 
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NewSc2

macrumors 65816
Jun 4, 2005
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New York, NY
*shrug* i've purchased an iPod (20gb 2nd gen), iPod nano, and another iPod nano for my gf. She received another 60gb video iPod for her birthday.

My roommate liked my ipod so much he got a 3rd gen 60gb one.

I don't need another iPod ;)
 
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Stella

macrumors G3
Apr 21, 2003
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Canada
iPods sales can't keep growing forever. Apple haven't released a new iPod in some time ( apart from the 1Gig nano ), so I'm not surprised that iPod sales will appear as 'suffering'.
 
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touring

macrumors newbie
Mar 10, 2006
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International Sales

If Apple could manage a deal with the World Cup like it did with the NCAA they would sell a few million more iPods real fast.
 
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jettredmont

macrumors 68030
Jul 25, 2002
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Article said:
The analyst arrived at his new 8-million figure by looking at the typical percentage of iPods shipped in past June quarters and measuring the sequential and year-over-year growth rates. He then averaged the two estimates from his sequential and year-over-year growth numbers and came up with 8.9 million iPods for the quarter.

In the previous quarters, however, Munster has found that extrapolation of the first month data typically overshot the actual reported iPod unit number for the quarter, so he removed 10% from the initial unit estimate to arrive at 8 million.

Okay, I'm not a Wall Street Analyst, but I do have enough scientific training to know that either his method (both the averaging two sets of data and the removing 10% part) is completely flawed or the article is not explaining it properly.

If the first month of a quarter is historically high, then that factor would already have been taken into account by the year-over-year estimates. If he believes the "first month of quarter" effect needs to be taken into account, then he should weight the year-over-year estimates more highly in his calculation than the month-over-month (which is generally the case in trending highly-year-cyclical data; month-over-month is taken as a single-digit-percent correction to year-over-year data, not "averaged" which implies a 50-50 weighting). This, "I think this is high so let's cut out 10%" BS is junk analysis at its finest.

In any case, analyst expectations are, historically, pretty much inaccurate in any case. A difference of 10% is, literally, well within the margin of error here. Unfortunately, they drive short-term trends in the market, and affect the day-to-day stock price. If you're a day-trader, this is important to you. If you're a long-term owner of the stock, then this is just noise.
 
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nagromme

macrumors G5
May 2, 2002
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From the Associated Press:

"Apple was widely predicted to exceed expectations during this timeframe. As in other recent quarters, Apple met that expectation. In doing so, they failed to meet the expectation that they would exceed expectations. For the coming quarter, analysts agree, investors should expect the unexpected."
 
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maestro55

macrumors 68030
Nov 13, 2005
2,709
0
Goat Farm in Meridian, TX
..and considering that Apple hasn't released a new one, if they still sell 8 million this quarter, they are doing a great job. However, I would like to see Apple prove the analyst wrong and sell above their expected 8.6million.
 
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