Apple TV Already Sold Out

AppleRecon.com (via Reel Pop) is reporting sales of Apple TV are already blowing away expectations. The blog reports a member of Apple's (AAPL) design group claims the 100,000 units the company ordered from Inventec have been sold and Apple plans to order 200,000 more. "Apple is now planning to sell over a million Apple TV devices leading up to the 2007 holiday season," the report said.

Disclaimer: I own shares of Apple.

AAPL 1-yr chart:

Comments

[Julian Ivan...:]

I posted these numbers awhile back, but I'll copy theme here for reference seeing as the subject has come up:

The iTV was number one at the US Apple Store for two weeks (its dropped down a bit now, but is still high up on the charts relatively), outselling everything including iPods.

It is also #4 in Canada, and in the UK, and all over Europe, none of which have movie or TV downloads. This proves the incredible appeal of this device even in markets in which its functionality is more limited than in the US.

Rough calculations (very, very rough!) of the impact of strong iTV sales on Q2:

- Apple sell 9m iPods/quarter (holiday season aside when they sold 21m!)
- 10% of Apple's sales come from the online Apple Store.
- Apple sell 900k iPods/quarter online
- That's a very neat 10k iPods/day
- iTV has been on sale for a week, and is outselling the iPod
- So Apple may have sold over 70k iTVs since the product was announced.
- If the device stays near the top of the list, then we can assume demand is incredibly strong and may indeed materially impact AAPL's Q2 guidance.
- But remember that 100k iTVs only = $30m revs. Apple will have to sell a lot of iTVs to really impact earnings However, I think margins on this device are very high - much better than iPods - and will be good for AAPL's earnings if it sells well - and good for gross margins too.
- However, it is feasible that at this rate, Apple may well sell anywhere between 300k - 2m iTVs in Q2.
- That would dramatically alter the Q2 actual earnings picture and really help make up for any iPod slowdown or falling ASPs.

If Apple are shifting this many (21m) iPods, then it means the iTV is selling at an incredible pace and is likely to add materially to earnings for Q2.

Every 1m iPods with an average selling price of $170 = 5c earnings for AAPL. So with the iTV being a high-margin product, and selling for $299, it is reasonable to assume that every 1m iTVs sold is about 8c EPS for AAPL. At this rate, AAPL will be on track to sell 250-500k iTVs in Q2, which would add between 2-4c EPS for AAPL.

Nowhere near this number has been allowed for in the company's guidance and leaves a room for a considerable upside surprise on its own.

2007 Jan 30 05:00 AM

[Tom B:]

It is the "Dark Horse" Product.

Consider: I watch ALMOST NO TV. I DON'T Subscribe to cable-- Time Warner charges me 45/month for Cable Internet and WON'T cut me a break to add Cable TV!!!!!??? Idiots! But Apple TV looks appealling. I could buy iTunes National Geographic specials and beam them to my TV for the kids to watch. And YouTube is free, man. Pretty cool. The only thing stopping me is that my current TV is ancient and won't connect up to the Apple unit. But in a year or so....

2007 Jan 30 09:21 AM