My early FQ1 '10 Apple unit sales estimates include: Three million Macs, twenty million iPods (including the popular iPod touch) and over 6 million iPhone units. Although iPhones have been flooding into mainland China through Hong Kong and other gray market sources, the opening of the mainland through an authorized carrier will materially increase unit shipments for the quarter.
The newly refreshed iMac will be high demand and Apple may be challenged keeping the global channel stocked with adequate inventory. Apple's decision to refresh the iMac in October will positively impact unit sales in the December quarter due to elimination of concerns for a post-holiday January refresh of the company's desktop computer line. The annual anticipation of a January iMac refresh had skewed consumer buying patterns in years past.
The December quarter is traditionally the "iPod quarter" and although the product line may see a year-over-year unit sales decline as that product segment reaches a mature market phase, iPod touch sales will positively impact ASPs and extend the global penetration of iPhone OS-based devices.
I tend to ignore Apple's revenue and earning guidance. I view management guidance as Apple's estimates of virtually guaranteed results based on internal projections. But the conference call information that accompanies the guidance yields important information. Apple is anticipating a sequential drop in gross margins due to higher build costs on new products (the iMac) as well as in increase in transportation costs (specifically air freight expenses) in moving product from manufacturing to points of sale or in the case of Apple's Internet sales avenue from manufacturing to customer delivery. Again, I suspect much of the increase in shipping costs relates directly to the new iMac which will remain in high demand throughout the Christmas shopping season.
The consensus estimate for the quarter is currently $11.91 billion in GAAP revenue and $2.04 in GAAP earnings per share. I expect Apple to handily beat the current consensus estimates and expect the analyst estimates that comprise the consensus to rise on average during and immediately following the close of the December quarter.