Apple Hits A Global Home Run With New iPhones
Shares in iconic smartphone maker Apple Inc. (NASDAQ: AAPL) gapped up sharply this morning on the heels of news that the company has had the most successful launch of its iPhone series ever, with its iPhone 5s and iPhone 5c models. In the first time that the company has launched two products simultaneously, fans were lined up around the world on Friday to get their hands on one or more of the devices. Apple reckons that over nine million of the phones have sold in the past three days. When Apple debuted the iPhone 5 a year ago, it sold more than five million in the first three days after its launch.
The velocity of sales has taken many analysts by surprise. They had predicted that there could be an upside demand for as many as seven million of the phones after launch, but they hardly expected nine million in the first days. In fact, demand for the iPhone 5s has exceeded initial supply. More of the phones will be shipped in coming weeks with orders being taken for them at a breakneck pace. Gold seems to be the most popular color and will not be shipped until October. If you opt for space grey or silver, you’ll have your new phone in seven to 10 days.
The launch coincides with new markets that have opened up for the iPhone. Although an expected deal was not announced between Apple and China Mobile (NYSE: CHL) during a media event on 11 September, there is still a large subscriber base with China Telecom (NYSE: CHA) and China Unicom (NYSE: CHU) that Apple can tap into. China Unicom reported that it had taken orders for over 100,000 of the units in prelaunch. In addition, this was the first iPhone launch in Singapore and Puerto Rico. It will be interesting to see how supply affects demand for the iPhones. It is possible that lack of immediate supply could push sales down slightly; particularly for the upcoming holiday season.
The company disclosed today that it expects its FQ4 revenue to be at the high end of a guidance range of $34 billion to $37 billion. Consensus is at $36.1 billion. Apple also sees its gross margin hitting the high end of a guidance range of 36 percent to 37 percent. The reaction of consumers to the new iPhones has managed to drive the stock higher, which has traded up to $496.91 in the last couple of hours after closing at $482.60 on Friday.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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