By Carl HoweI wrote yesterday about my predictions for Apple's (ticker: AAPL) jolly holiday season based upon sales of about 8 million iPods. Well apparently, UBS's Ben Reitzes thinks I'm just a piker. The Associated Press today reports that he sees Apple selling 11.4 million iPods and garnering revenue of $5.2 billion in sales, and $0.58 in earnings per share.
My reaction: Wow! That implies that Apple somehow got the manufacturing capacity to crank out about five million more iPods than last quarter. Let's do the math on that: My estimate of 8 million requires that manufacturing throughput of about 89,000 iPods a day. Ben's requires about 127,000 per day. To me, that would imply that Apple brought another production line on-line for this quarter. The big question is, "Did they?"
The big Taiwanese contract manufacturers for iPods are Inventec, Asustek Computer, and Foxconn Electronics. But Foxconn Electronics has some additional business keeping it busy lately: they are making Microsoft's XBox 360, and my guess is that Redmond has them running flat-out at the moment.
All I know is that you don't get nearly 100% more production capacity by saying just telling people to work faster. The sales numbers for the last four quarters of iPods have been 4,580, 5,311, 6,155, and 6,451. This 11.4 million number would imply Apple made a huge bet to ramp up production. If that is true, it's going to be a very Merry Christmas for both Apple execs and shareholders. But until I hear or read that Apple actually did contract to about double its previous production, I'm going to stick with my more modest estimates.
Anyone interested in the competition for contract manufacturing for Christmas 2005 in China should read this article at Digitimes. Those Digitimes people have some pretty interesting data.