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Tuesday, June 10, 2008

Apple (AAPL) numbers go higher around the street

Target prices and estimates going up all around for the most part. Piper backs out AT&T's reduced guidance and arrives at an estimate that AT&T will be paying $466 per iPhone. That obviously implies a higher ASP than a $200 subsidy. Details will likely become clearer over the coming weeks. I think $399 for the 8gb phone and perhaps $499 for the 16gb. I would also point out that the company guidance of 10mm units is likely ridiculously low assuming Apple doesn't hit further production snags. They're at 6mm units and its June. The back half of the year is consumer electronics heavy. I would think we're going to be looking at a number far in excess of 16mm units -- maybe even 20? -- before the year is out.

On the surface, iPods look a little expensive relative to the iPhone functionality available for the same price point. iPhones on the other hand have a much higher total cost of ownership for a consumer with the ongoing monthly payments of $70+ even at the minimum plan.

Expectations are low for the June quarter after the company's tepid gross margin guidance. The only datapoint I have to add here is that the company got a lot of flash memory in at the lows at the beginning of the quarter and that will help the comparisons greatly with the prior couple of quarters where they were working off much higher priced memory in their cost of goods -- hopefully this indicates their margin guidance was overly conservative. Macs are typically strong in September for back to school and have more momentum this year than in years past. Expect a lot of excitement about the Apple product line heading into December.

I'm compelled to continue to like it here.

1 comment:

Anonymous said...

Thats 6M units so far - June quarter will likely be below 1M units. Having said that, they should be able to do 10M units in the 2nd half of 2008 - at least thats what I am modeling. Great blog.

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