The Math Behind 8 Million Apple iPhone 5s In Launch Weekend: Munster

The Math Behind 8 Million Apple iPhone 5s In Launch Weekend: Munster
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Analysts from Piper Jaffray are confident that Apple Inc. (NASDAQ:AAPL) will be able to sell as many as 10 million iPhone 5 units during the weekend launch sale of the product, following the result of the company’s pre-order sales.

The Math Behind 8 Million Apple iPhone 5s In Launch Weekend: Munster

Apple Inc. (NASDAQ:AAPL) was surprised by the large consumer demand for the iPhone 5, as pre-orders were sold out within an hour. The company reported earlier today that it sold 2 million pre-orders of iPhone 5 during the first day of sales. The result doubled the 1 million sales record of the iPhone 4S after 24 hours in October of last year.

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In a note to investors, Gene Munster and Douglas Clinton, analysts at Piper Jaffray, gave an 8 million conservative sales target for the iPhone 5 weekend launch sale.

The analyst wrote that Apple Inc. (NASDAQ:AAPL) is capable of selling an additional 6 million iPhone 5 units easily, given the fact that the company already sold 2 million pre-orders. According to them,  “The reason we are confident in the 8 million two folds. First, initial pre-orders for the iPhone 5 was 100% y/y from the iPhone 4S…Second, given the 2 million pre-orders, getting to 8 million units implies roughly 6 million additional units at pre-order or retail compared to the 3 million from the iPhone 4S or 100% y/y growth.”

The analysts also cited the positive reaction of 73 % of consumers on Twitter, regarding the launching of the iPhone 5, compared with the 51% positive feedback on the iPhone 4S.

The analyst said the worst-case scenario for Apple’s weekend launch sale would be 6 million units. With the existing 2 million pre-order sales, Apple needs 4 million in retail sales to achieve a 33% y/y growth. Analysts noted that the Cupertino-based based company was able to sell a total of 4 million iPhone 4S units during the first three days, which means the company only sold 3 million units at retail stores.

Munster and Clinton have no doubt that their 8 million sales target for Apple’s iPhone 5 is achievable.

On the other hand, T. Michael Walkley, analyst from Canaccord Genuity, believes Apple Inc. (NASDAQ:AAPL) would be able to sell between 9 million to 10 million iPhone 5 units by the end of this month. Walkley cited that the three main carriers of the mobile device, including AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), and Sprint Nextel Corporation (NYSE:S) observed “solid sales” of Apple’s legacy models.

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Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
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