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Despite 'Record' Opening Weekend, Goldman Fears "The iPhone Effect" On Retail Sales May Disappoint
The exuberant images this weekend of lines-around-the-block at Apple stores were met with triumphant flashing red headlines this morning when Apple announced the sale of more than 10 million iPhone 6 and 6 Plus models (more than expected). Typically, new product launches do not move the needle on aggregate US economic data. Apple’s iPhone has been the most notable exception, with past launches occasionally having a substantial effect on core retail sales. However, Goldman notes, with the launch of the new iPhone 6/6+ this month, estimates (based on historical data) of a 0.1 to 0.7ppt boost to September core retail sales is highly uncertain due to seasonal adjustments that have been highly erratic, and could easily take a big bite out of the Apple effect.
- *APPLE HAS SOLD OVER 10M NEW IPHONE 6 AND IPHONE 6 PLUS MODELS
- *APPLE SAYS SALES FOR IPHONE 6 & IPHONE 6 PLUS EXCEEDED VIEWS
- *APPLE'S COOK: COULD HAVE SOLD MORE IPHONES W/ GREATER SUPPLY
- *APPLE SAYS SALES FOR IPHONE 6 & IPHONE 6 PLUS EXCEEDED VIEWS
Via Goldman Sachs,
Typically, new product launches do not move the needle on aggregate US economic data. Apple’s iPhone has been the most notable exception, with past launches occasionally having a substantial effect on core retail sales. In particular, iPhone sales show up in two categories of the report: electronics stores (representing in-store sales) and "nonstore retailers" (representing online sales). Exhibit 1 shows the behavior of these two categories of retail sales during the release month for the iPhone 4S, iPhone 5, and iPhone 5S/5C, both on an initial print (i.e. as-reported) basis, as well as the final revised estimates. The iPhone 4S and 5 launches showed up clearly, particularly in the initial print data. The iPhone 5S/5C launch did not appear to boost retail sales as notably, perhaps due to (1) the lack of a preorder period for the 5S, and (2) the fact that the 5C was not as popular as initially hoped, with many retailer orders heading into inventory.
Preorders for the iPhone 6/6+—which began on September 12—have been record-breaking, at a reported 4 million units in the first 24 hours (up from 2 million for the iPhone 5). Our IT hardware equity analysts project 8 million units for first weekend sales, which will probably be released on September 22. Exhibit 2 shows how past company sales metrics have mapped into the initial print retail sales data. Because the Census Bureau does not require standardization of how retailers report cell phone sales (by retail price, discounted price with a cellular contract, etc.), it is not possible to directly estimate the retail sales effect with a simple price x quantity calculation. In addition, preorders and opening weekend sales are reported on a global, rather than US-specific, basis. However, using the simple units to sales "translation" from the iPhone 4S and the iPhone 5, we would expect a boost of about seven-tenths of a percentage point to the September core retail sales figure. On the other end of the spectrum, looking at the experience of the 5S/5C—likely less comparable than the other examples to the 6/6+ rollout—one might expect a small boost of only one-tenth of a percentage point.
Of course, once first weekend sales are available, we may be able to refine this figure. Notably, China will not be included in first weekend sales due to delays with regulatory approval, meaning that any given unit level of sales probably represents more US sales than historical comparisons would suggest. However, the level of sales reported by Apple is not the only variable in play. The retail sales data are reported on a seasonally-adjusted basis, and the idiosyncrasies of seasonal adjustment can often be a source of volatility. Specifically, the expected September seasonal for nonstore retail has been highly erratic (Exhibit 3). Although the Census Bureau provides indicative seasonal factors for data not yet released—shown as striped columns at the far right of the exhibit—these are subject to considerable revision at the time the data is reported.
Nonetheless, the indicative seasonal adjustments provided by Census do look like a tougher hurdle this year than in prior years. This could reflect a number of factors: (1) the tendency for fall product launches from Apple may be starting to be incorporated into "normal" seasonality, (2) the early timing of Labor Day could be a factor, or (3) shifting seasonality in areas completely unrelated to the iPhone could be driving the higher expected seasonal gain. The first possibility would represent the most downside risk to our earlier estimate of a 0.1 to 0.7% boost to September core retail sales. At this point, it is too early to have an explicit forecast for the September retail sales report, and we will refine our estimate of the iPhone effect further in coming weeks, but our early analysis points to September upside relative to the recent trend on core retail sales.
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10m - damn aren't we the suckers.
Yeah but when the iPhone 7 comes out, who'll be laughing then....or crying?
Samsung probably.
Stop junking Winston.....he can only afford a Samsung.
I've got one to......it works pretty damn good.
Superior in several meaningful aspects. Short the S&P; go long Silver and Gold; they're rallying. it's the start of a new week, folks.
And, they off. Off their rockers. but, open, for buz. in New Yawk. and everythig is Red. the global dow fell down a stairway. Buy Silver and Crude Oil this week for profits. that is all; retreating to the Fuher Bunker to take some more pills.
Meanwhile.... housing sales are down and inventory is up... looks like Americans are adjusting very well to their new iPoverty.
Get your NSA hacked mobile devices right here folks, get your NSA hacked mobile devices right her folks....LOL the sheeple are stampeding for their shackles. Before I ever help anyone out I check to see what phone they carry. If its an iphone I tell them sorry can't help you.
Whoever downvoted me; God will get you, you know; he really will. He's watching you.
I did that...
So sorry....
I'm too cheap to even spring for a Samsung.
A $20 Kyocera is just fine for me.Anything more makes you a poseur in my book.
My first cellphone cost me $5k, for the Motorola brick, the novelty factor has long since worn off.
Ah yes, the dear old brick; those were the days. you must be almost as ancient as I am.
I thought I looked so cool, with my matching Porsche 954.
Now I don't even think I get get in the Porsche, and I definitely could'nt get our of
it without assistance.i
Brick phone??? That's like from space compared to my original "car phone" whose guts filled 4/5ths of my Lincoln LSC's trunk.
Corded handset up front... special antenna on the roof... 2$ per minute... Now that, THAT was a phone!!!!
I had that before my brick.Had to use the operator to connect calls.
Yeah, those phones were awesome! I wonder if there was an even earlier version of that type of car phone that had a rotary dial???
My 5 yr old mobile phone does what the new Apple 6 does too. What's all the buzz about?????
Apple could have capitalized on early orders and charged $50 (preview fee) extra for a month. They should take advantage of the media hype. Most people would be willing to pay $50 extra just to say they have one. Same with those waiting in line.
iApple consuming zombies.
Put The Lime In The Coconut - Harry Nilsson
http://www.youtube.com/watch?v=aA9OqUuA6a0
I disagree. Once they eat their first one, they will be back for seconds...
Vindaloo iPhones ?
You could be onto something there.
I'll stick with my $20 Kyocera thanks.
Never underestimate the stupidity of the American public. The most important thing to this society is not the endless wars, the massive deficits, global climate change, fracking, etc, it’s a new f***ing toy that comes out. Unemployed, barely employed, waiting on line for days…what the f*** is the matter with these people? How did we get to this level? Wall Street and the bankers love it…keep the morons borrowing money and buying more crap they don’t need and can’t afford. Keep the credit spigot open wide so anyone who can fog a mirror can get a loan for almost anything. This is why it all fell apart the last time, and nothing has changed…at all. The Fed Bank helps the rich get richer and helps the rest get more in debt. Trickle down...right.
'Muricans, in a word....iStupid!
You're so close, Klink. Try iDiot.
Never misunderestimate. Never
The iPhone effect disappears when the cash goes abroad and sits in offshore accounts.
Retail is brisk I hear with zero foot traffic and negative profit margins. That, despite items reduced 90% and then they send out coupons, "$10 off $25" plus give you cash back for every xx amount of money.
Anything to get a warm body in the eerily empty stores.
Some call it "Robust" ... I call it "Desperation."
Hey where's Reggie bashing Apple and promoting Google? Who's stock did better? Reggie? Reggie?
And for all the fanbois. LOL So desperate to hate Apple. As they say, haters gotta hate.
PS: Went to check out the Apple store yesterday.... PACKED.
I don't hate Apple -- they have cultivated remarkable customer loyalty because lots of people love their products. I think their phones are great. It's just that I would never buy an iProduct because I don't want an iProduct. Besides, iTunes is the worst software program ever created.
All iPhones are not better than all Androids. (I suspect all of them are NSA infested spy phones, but that's a different story.)
I never go to packed stores for anything, even if they're giving it away. But I would never criticize people who camp out for a several days and enjoy the social event of waiting for their latest dream device.
Just to annoy:
I see the Apple store and I see a whole swath of America in there. Yes rich and poor hipsters, geeks, moms, sons, black, white, hispanice, asian, etc..... All enjoying themselves, learning, and having a great "retail" store experience.
This is key. Apple is sooo much more than an iOS device. Their computers create the web you use. Just look around at the real geeks creating the sites you use and the upcoming ones to be. They are using Apple laptops. Why? Well the unix underpinnings is one reason. The other is the software on top.
Then there are my Android people. 20% are just very geeky, non-developers, trying to be more than they are because they can "customize" their phone more. Then there are everyone else. Budget minded folks who just need to text, facebook, mail and surf.
Cheers
Just to annoy:
I see the Apple store and I see a whole swath of America in there. Yes rich and poor hipsters, geeks, moms, sons, black, white, hispanice, asian, etc..... All enjoying themselves, learning, and having a great "retail" store experience.
This is key. Apple is sooo much more than an iOS device. Their computers create the web you use. Just look around at the real geeks creating the sites you use and the upcoming ones to be. They are using Apple laptops. Why? Well the unix underpinnings is one reason. The other is the software on top.
Then there are my Android people. 20% are just very geeky, non-developers, trying to be more than they are because they can "customize" their phone more. Then there are everyone else. Budget minded folks who just need to text, facebook, mail and surf.
Cheers
The Iphone is to minimum wage waitresses as crack is to $20 hookers as Ponzi is to Goldman as tax dollars is to Defense budget as. . . . .
How does buying an iPhoney help the GDP?- It's made in China, by a company that keeps it's money off shore the US so they don't have to pay taxes here. And a good share of the phones were probably sold to people who didn't need them and couldn't afford them.
I wonder how sales to Sprint count? They were running commercials yesterday for a free iPhone 6 and an unlimited data contract for $50 per month.
And here we go folks, ready or not; off for another dizzying week on the Tilt-A-Wheel. (R.M.).
I just a bought Chinese Oppo. $250, latest android and pisses all over my Samsung 5.
What kind of insecure dipshits get rid of a perfectly good phone so that they can purchase another one so that they feel better about themselves.
Idiocy.
Rumor has it that the new iPhone 6 line comes with hardware support for a special anal vibrator app... that would perfectly explain the crowds of Apple poofters waiting in line...
iPhone 6 fingerprint sensor "workaround";)
http://www.youtube.com/watch?v=jXC21g2bYFY
Color TV affect. Cant afford a home so spend money on electronic crap.