In the note, which was obtained by TMO, Mr. Um wrote: “While we expected iPhone to drive [fiscal] 1Q due to a holiday quarter launch and accelerated distribution, the magnitude of upside is quite impressive. iPhone has legs into the March quarter as supply/demand remains imbalanced exiting December and [international rollouts continue into countries such as China].”
He added: “iPad strength was encouraging in the face of lower cost competition (i.e. Amazon), and an impending iPad 3 launch in the March quarter should enable Apple to continue to drive growth and maintain share in the tablet market. These trends, along with iPhone 5 in 2H12, and further international penetration, set AAPL up nicely for 2012.”
Mr. Um’s views were echoed by Technology Business Research analyst Beau Skonieczny, who observed that iPhone “sales were especially strong due to a significant release of pent up demand as customers held off on iPhone purchases over prior quarters in anticipation of the iPhone 4S. The inclusion of Siri – an artificial intelligence component integrated into the iPhone 4S software – helped to further support sales of the new iPhone, as users were attracted by the utility of more easily managing daily tasks via voice requests.”
While Mr. Skonieczny was in line with Mr. Um’s assessment of the iPad’s continued success, he had a caveat: “TBR believes Apple’s consumer-friendly ecosystem of software, support services and an inviting retail atmosphere continued to attract customers to the premium-priced Apple tablet. However, by only offering one tablet form factor in a premium price band, Apple is missing an opportunity to address the influx in demand for lower-priced, smaller form-factor tablets, evidenced by the success of the Kindle Fire during the holiday season.”
Mr. Skonieczny also had some thoughts on Apple’s Mac sales: “Mac portable sales were not fazed by increased competition in the premium consumer PC space – the ultrabook onslaught had a minimal impact on MacBook Air sales in 4Q11, which continued to support double-digit Mac portable unit and revenue growth year-to-year. TBR believes Apple’s consumer-focused ecosystem of software, support services and retail atmosphere will continue to have consumers lean toward MacBook Air over similarly priced ultrabooks in the near term.
He added: “In 4Q11, Apple continued to successfully convert consumer Windows PC users to Macs, with more than 50 percent of all Macs sold in retail stores going to users that have never owned a Mac. As the prices of ultrabooks decline over time, with more models falling into the $649 to $799 range, the MacBook Air will encounter more competitive pressure from lower-priced alternatives. Due to the current costs of component prices, especially NAND memory, TBR does not expect to see any sub-$800 ultrabooks that are comparable to the MacBook Air in the near term.”