updated 11:10 am EST, Wed December 10, 2008
Kaufman on iPhone demand
Demand for the iPhone remains fairly good, according to Kaufman Bros. analyst Shaw Wu. Probing of distribution and supply chain checks is said to show that iPhone demand is "healthy" in Europe, the US and most of the Asia-Pacific region, although Japan's market is believed to have mixed trends. Wu expects that Apple will ship approximately 6 million phones in the December quarter, a figure close to 10 percent below estimated build numbers. Investors are generally predicting shipments anywhere between 5 and 7 million, though the majority are said to be leaning towards 6 to 6.5 million.
A determining factor may be the popularity of Apple's iPhone 3G Gift Cards, sold as placeholders for actual iPhones due to forced in-store activation policies. Although Apple is able to collect money from the sale of each card, it cannot list these transactions as iPhone sales until card owners activate their hardware. A fair amount of iPhone income may thus not be recognized until the March quarter, depending on how many people activate their phones after Christmas. As many as 700,000 to 1 million units could fall into this category.
The Kaufman firm continues to disagree with UBS, meanwhile, on the prospect of a $99 iPhone. While Wu concurs that a $99 model for Walmart is unlikely this year, he suggests that the pricing itself is inevitable, as it only demands greater subsidies from cellular carriers. The higher ARPUs created by the iPhone are extremely valuable to telecom companies, Wu comments, and so higher subsidies may be considered worth the tradeoff.