Apple Inc. (NASDAQ:AAPL) shares fell to $529.69 a share. However, some investors think that the lower price is a buying opportunity, as the fundamentals are still strong. Gene Munster of Pipper Jaffray is known for his bullish views on Apple, and is sticking with his call. He did a recent survey on iPhone 5 purchases and even studied twitter for the survey.
Based on Munster’s proprietary 800+ US consumer and Twitter purchase intent studies, he believes that iPhone 5 demand remains strong going into the end of 2012, for the following reasons:
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First, in his third survey of 800+ US consumers, of those that plan to buy a smartphone over the next 3 months, 53.3% expect it to be an iPhone 5 compared to 54.9% as of 10/16 and 47.7% as of 9/9.
Second, a purchase intent study of iPhone from Twitter data suggests that iPhone 5 purchase trends are ahead of those from iPhone 4S 2.5 months after launch.
Finally, the bottom line is that he still expects 45 million iPhones to be sold in the December quarter. He reiterates his overweight rating and $900 target.
A little more about the survey:
iPhone 5 Consumer Survey Suggests Demand Remains Strong. Over the past three months, Pipper Jaffray has conducted three surveys of 700-800 US consumers. In each survey they have asked consumers what smartphone, if any, they plan on purchasing over the next three months.
As demonstrated in the table above, the iPhone 5 jumped from 47.7% of consumers that plan on purchasing some smartphone in the given period prior to the iPhone 5 launch to 54.9% following the launch of the phone.
Now in mid-December, their survey suggests that 53.3% of consumers expect to purchase an iPhone 5 in the next three months. Munster believes that this is a positive that demonstrates the majority of US consumers want an iPhone 5 even following the launch craze and despite the Maps issues that have been widely noted.
Based on an analysis of Tweets that contain the keyword iPhone in addition to purchase related keywords like “bought,” “shipped,” “purchased,” etc., Munster believes that purchase trends for Apple Inc. (NASDAQ:AAPL)’s iPhone 5 are ahead of those for the iPhone 4S. The study suggests that roughly 2.5 months post launch, the demand index is up 30-40% y/y. He even has a nice little chart to show it:
More specifically, over the past two weeks, the demand index is up an average of 36% y/y and he notes that this is the iPhone 5 demand ahead of Christmas, when some may be waiting to be gifted the device, compared to the 4S, which would be in January given the 2.5 month comparison. His 45 million unit estimate assumes 21% y/y growth in iPhone units, and the demand survey gives Munster continued confidence in the estimate.