iPhone sales jumped dramatically at Verizon. And Morgan Stanley analyst Katy Huberty recently upped her forecast of the number of phones Apple is selling this quarter.
Are we in for some surprises with Apple earnings next week?
Verizon’s results, released today, reveal that 3.8 million of its 7.5 million new smartphone activations this past quarter were iPhones. That’s 51 percent of all new smartphone activations, and the 3.8 million iPhones is a 41 percent increase from the 2.7 million iPhones Verizon activated in the year-ago quarter.
“Either Verizon is doing much better than other carriers this quarter or our iPhone estimates are conservative,” Apple analyst Brian White of Topeka Capital Markets said in a research note this morning. “Over the past seven quarters, Verizon has accounted for approximately 11% of Apple’s total iPhone shipments and 10% in 2QCY12. Based on our current iPhone estimates, Verizon would account for approximately 13.6% of iPhone sales in 2QCY13.”
Put that together with Katy Huberty’s comments yesterday, in which she said that Apple would report shipments of between 29 to 32 million iPhones next week, up from consensus estimates of 26.5 million, and it looks like the consensus estimates might indeed be conservative.
So we may see a quarterly earnings surprise on Thursday next week, as Apple reveals its Q3 2013 numbers
One caveat White is careful to add:
“Although we never try to rely too much on iPhone activations from a single carrier or emphasize a single data point too much, the Verizon print appears to be positive.”
The core question is whether it’s just Verizon seeing these high numbers, or other carriers, too; and whether Apple can translate its domestic success, where recent numbers have iPhone growing faster than Android, to international markets, which are overwhelmingly Android.
The markets have responded to Verizon’s news already, with Apple stock up about $3 in the morning so far.