in Jan 17 ’15 $102.86 P @ 70c (as many as I have $88.57 C that I prefer to sell in Jan for tax reasons)
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I think I want one
Now I understand better why I heard Chinese during the few minutes the live stream worked for me.
Of course I’m biased for next week (read crazy bullish), I have 315 ITM calls for Jan 15 and 140 $107 calls expiring next week. But again, after a long time, I have the same feeling again: they are all wrong and there are going to be fireworks!
Who is wrong? Well, analysts, the press, most investors. I haven’t seen estimates above the range 10-11M and most are even below last year. And I agree that simply long lines cannot tell the whole story, as for example some think last year’s good numbers are due to “channel fill”, i.e. 5c on the shelves everywhere and nobody to buy them (huge production and yields on the plastic one). I’ll try to “prove” that even if that’s true, that 9M mark will be trounced.
A quick remainder on the last year’s situation. 5s was production constrained, out of stock. 5c cheaper model that Apple thought will sell in large quantities, was only exceptionally out of stock. So because demand was not aligned with supply, one could think the first week-end should have been a huge disappointment. Not so, sales jumped to 9M from 5M the previous year. I will assume the bearish reason for that, 3M channel fill with 5c, otherwise my numbers that I will detail below would be definitely crazy.
During the last year, 5s + 5c went to be 40+% of the market
iPhone 5s + 5c usage during the first year.
Assuming 10% of older iPhones went out of use, this means the total number of iPhones in use is about 60% larger in Sep ’14 than Sep ’13 (because if you have a quantity A and add B so that B represents 50% of the total A + B, than B = A, meaning a 100% increase of the total).
Now, let’s remember how the usage of new iPhones progressed after launch one year ago
iPhone 5s + 5c usage during the first two weeks.
After the first week-end, combined percentage use was around 1.85%.
What about now?
iPhone 6 usage during the first two days.
After two days, combined usage is around 3.75% or about double the corresponding stat last year. Assume this number will not grow by the end of the week-end (as it did not last year). Assume only 6M (9M announced, 3M in channel) were in users’ hands last year and there are none in the channel this year (otherwise sales should be even higher).
Considering also that there are about 60% more iPhones in use this year, it gives an estimate of 19.2M, which I agree, looks impossible (at each step I have built a bearish assumption). Let me subtract 30% for other errors (maybe this year people simply use more their new toys or the sampling method changed, rounding method for days / from hours graph etc.).
This still gives a lower bound of about 13.5M iPhones sold during the week-end, which is way outside any prediction out there! This would represent 50% growth compared to last year. Such growth rates seem just a distant memory and will light a fire under analysts’ view for the next year, price targets and the press.
Very interesting times!
Please show me where I’m wrong
If you are interested about the data source and hour by hour evolution, it is here
So much mouth foam during the last couple of years about how Apple will roll on the floor and die when (soon) the mighty carriers get tired of forfeiting their profits to Apple. In real life it turns out that in a saturated market (the US), the best way to get customers from your competition is to be very aggresive with offers for the best phone out there. With the most poweful punch directly in Samsung’s soft spot, I see nothing that stops Apple from selling 200M iPhone 6 and 250M iPhone 6S (next year’s model).
End of 2015 – first half of 2016 target: $150. Be aware, we will have at least another 20-40% dip, but there is no way to know when and from what level
Video drops, goes low res, even an “Access denied” at http://www.apple.com
Will they ever get it how to make those pipes work?