updated 01:55 pm EST, Wed November 21, 2007
Study: 24-25m iPod sales
Apple may have already sold between 24-25 million iPods during its December quarter, according to Piper Jaffray senior analyst Gene Munster. Citing new NPD data to back the estimate, Munster is predicting 23.5 million iPod sales for Apple's December quarter, which falls above Wall Street consensus of around 23 million shipments. "We see this as a positive data point, and we note that we have conservatively factored in an avg monthly contribution for October of 15 percent vs. the 3 year average of 12 percent due to the innovative new iPods released in September," the analyst said. Piper Jaffray reiterated its "Buy" rating on Apple shares with a $250 price target. [corrected]
Munster cautions that his 24-25 million unit approximation is based on various assumptions and is an extrapolation of one month of data, adding that when the second month of data is released his analysis will likely lead to a slightly different iPod unit figure than his current estimate.
"Our analysis of NPD iPod unit data starts by looking at the percentage contribution in NPD data from each month of the quarter in past December quarters. Over the past three December quarters, iPod unit shipments were broken down monthly as follows (on average): October - 12 percent, November - 24 percent, and December - 64 percent."
The analyst conservatively factored in a larger-than-average October monthly contribution (15 percent) for his estimate because "the new iPods announced in September are radically different from the previous models."
Apple has over the last three years routinely announced new iPods in September, but Munster says this year's models are significantly more innovative than the past upgrades and, as such, are driving sales in October to a greater degree than they have in the past.
"Using the first month of NPD data and the typical percentage of iPods shipped in the first month, we can extrapolate to get an estimate for what NPD data will look like for the full December 2007 quarter. Using the estimate for NPD data in the full December 2007 quarter, we can measure the year-over-year and quarter-over-quarter growth rates vs. the December 2006 quarter and September 2007 quarter NPD iPod units," Munster explained.
"Applying the growth rates implied in the extrapolated full December 2007 quarter NPD data estimate to the iPod unit shipment actuals for December 2006 and September 2007, we can arrive at an average estimate for total actual shipments in the quarter. Our analysis points to iPod units of between 24 million and 25 million in the December 2007 quarter, compared to our estimate of 23.5 million and the Street consensus of approximately 23 million."