China's 2-million iPhone 5 launch: What the analysts say
Record first-weekend sales suggest a strong Chinese New Year for Apple
FORTUNE — On Friday, UBS’s Steven Milunovich wrote that “some of [his] Chinese sources do not expect the iPhone 5 to do as well as the iPhone 4S.” Two days later, Citigroup’s Glen Yeung wrote that reports of supply-chain order cuts “bring into question the strength of iPhone 5.”
That was before Apple (AAPL) announced that it sold more than 2 million iPhone 5s in mainland China last weekend, beating its previous Chinese iPhone releases — including the iPhone 4S that triggered launch-day riots last January.
On Monday, the analysts who cover the company were singing a different tune. Excerpts from their notes to clients below:
Topeka’s Brian White: China Can’t Shake Apple Fever as We Approach the Year of the Snake. “Recall, Apple launched the iPhone 5 in China on Friday (12/14) and given the lackluster lines, there was growing concern around demand for this new iPhone. Clearly, this view turned out to be incorrect as this represents a big print for Apple and the first time the Company ever issued a post-launch press release for iPhone sales in China. With the Chinese New Year beginning on February 10 and shopping season starting in January, Apple has the two hottest products (i.e., iPhone 5 and iPad mini) in the world available for the Chinese consumers… We have previously indicated that we expected a big uptick in China demand with the iPhone 5 as we believe both iPhone 4 and iPhone 4S owners will upgrade. The strong iPhone 5 sales this weekend support our view. The key reason is status. In our view, a new form factor shows the world that you have the latest and greatest iPhone, a sign of status in China.”
ISI’s Brian Marshall: Quick thoughts. “We view this as a very strong launch, particularly in light of a relatively limited 3G subscriber base in China. For comparison, recall AAPL had sold over 5mil iPhone 5 units in the weekend of its launch in the U.S. and 8 other developed markets. We estimate ~2mil iPhone 5 units were sold at U.S. carriers (T, VZ, S) in the first 10 days of launch or ~1.0% penetration of a post-paid subscriber base of ~200mil. In a shorter time span of just 3 days, AAPL sold over 2mil units at China Unicom and China Telecom, or ~1.5% penetration of a ~130mil 3G subscriber base. In our view, this suggests potential for subscriber penetration in China could be similar to that of developed countries despite per capita GDP that is less than 1/5 of the U.S.”
Asymco’s Horace Dediu: Calibrating launch performance for the iPhone 5 in China. “This is, as far as I know, the first weekend sales data for a single market outside of the US. The time span was three days and therefore the daily sales rate was 2/3 million per day. The following chart compares the launch performance for the launches which Apple reported:
More as they come in.