Analyst predicts knockout Q1 results for Apple

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Ming-Chi Kuo of KGI, one of the few credible analysts when it comes to Apple, has already published his numbers for Q1 2015, in which he predicts that iPhone, iPad and Mac shipments to be 58.2 million, 10.1 million and 4.5 million respectively. He also estimates that the new Apple Watch shipments stand at 631,000 units.

Apple’s iPhone shipments peaked, but still a record

Kuo says that iPhone shipments have peaked and that Apple will see a decline for the quarter of 21.8% in Q1 and an 11.6% quarter over quarter decline in Q2 with shipments of 51.4 million, still a record quarter for the company. The upshot is that Apple is selling lots of iPhones and there is no cause to worry yet.

iPhone shipments have peaked. We estimate iPhone shipments to decline 21.8% QoQ to 58.2 million units in 1Q15, milder than the seasonal pattern. While we look for QoQ decline of 11.6% to 51.4mn units for 2Q15, still better than seasonality, we believe shipments doesn’t just mean market demand but also partly represents pulled-in 3Q15 orders from Apple. Coupled with slowing shipments from the peak, we are neutral on iPhone supply chain shares.

Here’s how he breaks down the figures:

KGI Apple Q1 Results Estimate

Kuo states that iPad shipments will decline 52.7% quarter-over-quarter to just 10.1 units in Q1, with shipments in Q2 2015 declining 28.5% to 7.2 million units. He says the lacklustre numbers are attributed to industry challenges rather than slow seasonality.

On the bright side, Kuo believes the Mac will be a growth area for Apple, with 4.5 million units shipped in Q1, a quarter-over-quarter decline of 17.5%. Into Q2 however, he predicts a 21.5% increase to 5.5 million as a result of the new 12-inch MacBook and also back to school demand, which will help the uptick in sales.

We see a positive outlook for Mac. We look for QoQ decline of 17.5% to 4.5mn units for Mac shipments in 1Q15 and 21.5% QoQ growth to 5.5mn units in 2Q15 on new product attraction and back-to-school demand. We are positive on Mac supply chain shares on stronger shipments momentum than the PC sector average.

Kuo states that it’s too early yet to tell if Apple Watch will be successful. He says that most buyers so far are hardcore Apple fans, and not the average consumer. He estimates that 631,000 units have shipped so far, which is less than most street estimates of 2-3 million units. He mentions labour shortages and slow production of the Taptic Engine, the haptic feedback component, and the AMOLED display – the first time that Apple has used such a a display in one of its products. For Q2, Kuo predicts that 3.8 million Apple Watch units will be shipped. Apple has said that it won’t break out Apple Watch numbers in its financials, but there may be a one-off statement this time around.

Apple is set to hold its quarterly earnings call on Monday, April 27th.

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