Thursday, September 30, 2010

Q4 10 numbers - Over the top

Hello Folks,

Apple will have their usual blow out quarter to end the fiscal year, and this will surprise no one. With a forward PE of 22, which is quite low in my humble opinion, this stock SHOULD skyrocket through the stratosphere..

My numbers:

iPods - - - - 9,750,000
iPhones - 10,466,160
iPads - - - - 5,227,200
Macs - - - - 4,056,000
EPS - - - - 4.40 / share
Revenue - 19.531 B
Gross Margin - 41.20%

Apple projected 18 billion with EPS of 3.44...

I made a trip into my local Apple store yesterday, and made all of the typical observations
  1. Packed house
  2. Blue shirted Apple geeks happily training new customers on the products.
  3. People walking out with various sized boxes - Looks like everything is selling - all products are selling.
  4. All product tables had an equal amount of attention. No one thing was getting more attention than others.
I will now go out on a limb with some bold predictions for 2011

  • Apple will open up the iPhone to other carriers in the first 6 months of 2011. They will not announce anything (of course) until the very last second. If they announce anything prematurely - it would kill their current sales through ATT. Of course they can't do that. You hear all of these conspiracy theories in blogs about Apple and other vendors, but if you think about it - it's quite simple. Remember we are talking about the kings of "pent up demand." Apple unveils the iPhone to one vendor, and it sets off a worldwide phenomenon and creates a paradigm shift in communications products. They hold it to one vendor, because they are not worried initially about taking over the world, they know they have a game changer, and they know they will set records with ATT. They also know that by limiting the partners, that they can control their growth in tiers. Let's call this the 3rd tier of iPhone growth. Tier 1 is the initial US rollout. Tier 2 is the international roll out, which has taken a couple of years, and it won't be be complete, until they conquer India and China. Tier 3 will be the inclusion of T-Mobile, Verizon, and Sprint in the US. My opinion, is this will be timed to coincide with the next iteration of iPhone 4, which will have an antenna upgrade.
  • Apple will sell 33 million iPads in FY11. It's first full fiscal year of iPad sales. Just to put that in perspective - Apple sold 11 million, then 20 million, and now 35 million in it's 3rd full fiscal year of sales for the iPhone.
  • Apple will sell 52 million iPhones in FY11, a 45% increase YOY.
  • Apple will sell 17 million MACs in FY11, a 25% increase YOY. There WILL be an effect from the iPad. In my opinion, the iPad effect is going to continue to fuel growth to the MAC, but not at the 33% growth rate we have been seeing on average. MACs growth will continue, but only at 25%..
  • 90 Billion revenue in FY11 - 40% increase
  • EPS for FY2011 - $22.50
  • Stock price January 2012 - $400.00

Well that's it for now.. I'm still recuperating from surgery to have my kidney removed (Cancer) but am doing well, and will be back to work in a couple of weeks..

Thanks for reading,
Dennis Hildebrand


  1. thanks for your analysis Dennis and I hope you are having a good recovery from your surgery. Your analysis and 2011 predictions (I believe) are right on!