Apple Pulls Out the Stops, Racks Up the Sales
Apple found a nice wad of cash in its stocking on Black Friday, with strong sales during what is traditionally the biggest retail day of the year in the U.S. One analyst estimated that each Apple retail location was selling nearly nine iPads per hour, on average. Meanwhile, federal authorities are taking a close look at "channel checks," a technique used by many Apple analysts to take a pulse on the company's performance.
Dec 1, 2010 5:00 AM PT
Black Friday saw Apple's cash register ringing almost continuously, and the company later offered various deals for Cyber Monday in an attempt to maximize earnings during the holiday sales period.
Piper Jaffray analyst Gene Munster reportedly told investors that on average, each Apple store sold 8.8 iPads per hour. Mac sales had slowed, however, totaling about 8.2 per store per hour, compared to 8.3 last year and 13 in 2008. However, it's too early to say whether or not Mac sales are drying up.
Meanwhile, the iPad got boosts from billionaire industrialist Richard Branson's Virgin Group, which launched a digital magazine exclusively on the device Tuesday, as well as from Oprah, who gave the device a possibly lucrative thumbs-up.
The SEC, however, turned out to be a potential spoiler, investigating Wall Street analysts covering Apple for possible insider trading. Its inquiries could end up altering the face of investment reports.
Overall, however, this holiday season looks to be a good one for Apple.
Hap-hap-happy Holidays for Cupertino
Like iPads, MacBook Airs were flying off the shelves. Deutsche Bank analyst Chris Whitmore reportedly found demand for the new MacBook Air to be very healthy and said the 11-inch version was selling particularly well.
"My estimates show 6 million iPads, 16 million iPhones and 18.1 million iPods will be sold in this December quarter," Brian Marshall, an analyst at Gleacher, told MacNewsWorld. "Black Friday was successful for Apple, and the iPad will be the holiday gift of choice."
Meanwhile, JPMorgan has decided to equip its bankers with iPads, Bloomberg reports.
Further, Oprah Winfrey declared the iPad her "all-time favorite" on a recent show and gave away nearly 300 of them to her audience. Her recommendations carry tremendous weight among consumers, and the so-called "Oprah effect" might produce yet another jump in iPad sales.
Apple vs. the Publishers
On Tuesday, the iPad got yet another potential boost from billionaire industrialist Richard Branson's Virgin Group, which launched a digital magazine, "Project," exclusively on the device
News Corp. had previously announced it will unveil a digital publication, to be called "The Daily," exclusively on the iPad.
However, some publishers are unhappy with Apple's strict control over digital publications on the iPad, and a consortium of five major publishers has announced plans to launch a digital newsstand on the Android platform next year.
News of Branson's publication might bring the consortium, Next Issue Media, to heel.
"The iPad is the most widely accepted platform out there," Jeanniey Mullen, global executive vice president of Zinio, told MacNewsWorld. However, Zinio thinks there will eventually be a variety of digital platforms for media consumption, she said.
"Money talks, and there's no better device to follow if you want to ring up sales than the iPad," Laura DiDio, principal at ITIC, told MacNewsWorld. "I don't think publishers will be able to avoid the wonderful scent of money emanating from that device," she added.
However, Branson's "Project" e-magazine may cause Apple some headaches. Virgin has lined up a stellar group of advertisers for the launch, including Lexus, American Express and Panasonic. Whether that cuts into Apple's iAds platform and Cupertino's attempts to attract advertisers to the iPad independently remains to be seen.
Stats on iPad Love
An online survey of more than 1,800 consumers conducted jointly by Harrison Group and Zinio in September found that 55 percent of them consume more digital content than they expected, and 33 percent are spending more on buying digital content.
Further, the survey found that 13 percent of the respondents are interested in buying a tablet-based device within the next 12 months.
That led the Harrison Group to forecast sales of more than 20 million tablets and e-readers next year.
"I think that Virgin's deciding to go on the iPad exclusively is relevant and interesting, but in the grand scheme of things, it's just another activity in this trend of bringing the Internet to connected devices," Frank Dickson, a vice president of research at In-Stat, told MacNewsWorld.
"The whole digital publishing domain is based on CPM -- cost per thousand -- which means it's all based on how many eyeballs you can attract," Dickson explained. "The number of iPads is in the millions, but the number of smartphones is in the hundreds of millions and eventually will be in the billions, so publishers will reconfigure content for viewers where they want it and how they want it."
Still, iPad sales are cutting into demand for computers, especially netbooks, Gartner reported in its latest worldwide PC shipments forecast.
Whereas Gartner had previously estimated worldwide PC shipments in 2011 to grow by 18.1 percent, it now pegs that figure at 15.9 percent because of weaker demand, partly due to growing user interest in media tablets such as the iPad.
Feds Come A-Sniffin'
One possible bit of bad news for investors interested in Apple emerged last week, when the Wall Street Journal reported that federal prosecutors are investigating Wall Street analysts who use publicly available information about the supply chains of public companies.
The analysts' activity is known as "channel checks," and it is crucial to traders in Apple stocks.
"This is supply chain data that's publicly available," ITIC's DiDio pointed out.
The possibility of an investigation has many analysts worried, and several approached by MacNewsWorld declined comment.
If the SEC clamps down on channel checks, it would limit the amount of accurate information that's available to investors, who then would be unable to make informed decisions as to whether to buy, hold or sell stock. On the other hand, loose or poor regulation will also affect individual investors who may not be able to access the kind of information large hedge funds and brokerages can.
"Nobody wants the SEC breathing down their necks," DiDio said. "On the other hand, how do you suppress data like that? If you do, it'll make estimates and forecasts difficult. There's demand for this type of information."
Despite strong Black Friday sales reports, Apple stocks closed at US$311.15 Tuesday, down $5.72, after a rough day for the market in general. AAPL has been see-sawing wildly since shares closed just above the $300 mark Oct. 18, which is an indication of the uncertainty investors feel in the current economic conditions.