Both Morgan Stanley and UBS use web search analysis to help them forecast how many iPhones Apple sells, and both have June quarter iPhone sales of 50 million partly based on the results. With a number of sell-side estimates at 50 million or slightly above I believe buy-side expectations are in the 52 to 53 million range. (Note that I own Apple shares).
Katy Huberty’s survey indicates demand for 53 million iPhones
Morgan Stanley’s Apple analyst, Katy Huberty, AlphaWise May and June surveys both showed that Apple could sell 53 million iPhones in the June quarter. Huberty is projecting $48.3 billion in revenue (Street is at $48.6 billion) with 50 million iPhones and $1.82 of EPS (Street is at $1.76). If Apple sells an additional 3 million units it would add $1.9 billion in revenue to her estimate and $0.11 in EPS.
To further support her view of 53 million iPhones being sold Morgan Stanley’s Asia tech analyst, Jasmine Lu, estimates that Apple has asked its suppliers to build 54 million iPhones in the quarter and that the company may add to its 17 million in channel inventory.
Note that for five of the past six quarters Huberty’s AlphaWise survey has underestimated actual iPhone sales. The underestimates have ranged from 525 thousand to 7.5 million (the December 2014 quarter) while it overestimated the June 2014 quarter by 3.8 million units.
Steve Milunovich’s survey estimates 50.3 million iPhone demand
This is the third quarter that UBS’ Apple analyst, Steve Milunovich, has published his Evidence Lab iPhone Monitor. It is still trying to find its bearings as it was too low by 5.2 million in the December 2014 quarter and 3.2 million too high in the March 2015 quarter.
Milunovich increased his iPhone sales forecast from 48 to 50 million. This raised his revenue estimate for Apple’s June quarter from $51.8 to $53.1 billion and EPS projection from $1.93 to $2.01. Both of these are significantly above Street projections. This is the second time this quarter Milunovich has raised his iPhone, revenue and EPS estimates based on Evidence Lab results.
UBS’s supply chain checks for Apple’s iPhone indicate a build plan of 54 million units. Milunovich also believes that the company may continue to build some additional channel inventory.
His survey is based on historical shipment data from 20 countries and regions for which Google search values are established to forecast near-term demand. The data is showing continued strength in China with more than a 130% estimated search volume increase. Note that China Mobile has seen slower 4G subscriber growth for the first two months of the June quarter compared to the December and March quarters. Seasonality plays into this but it is something to keep an eye on.
