Can Apple Sell 38 Million iPhones?

The case for strong iPhone sales hinges on a very few factors. Huge sales in the United States are already expected. Sales in several large countries bolstered this. According to company:

Apple today announced it has sold over 10 million new iPhone 6 and iPhone 6 Plus models, a new record, just three days after the launch on September 19. iPhone 6 and iPhone 6 Plus are available in the US, Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the UK and will be available in more than 20 additional countries on September 26. The new iPhones will be available in 115 countries by the end of the year.

So, Apple’s overseas sales, particularly of the new iPhone 6 and iPhone 6 Plus will need to stay strong.

Apple said it is already well along to distribution in more markets:

Apple today announced that iPhone 6 and iPhone 6 Plus, the biggest advancements in iPhone history, will arrive in 36 additional countries and territories across Europe, Asia, the Middle East, Latin America and Africa by the end of October. iPhone 6 and iPhone 6 Plus will be available in a total of 69 countries and territories by the end of the month and are on track to be available in more than 115 countries by the end of the year, making this the fastest iPhone rollout ever.

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None of these is more important than China, and the company has already said it has made advances there:

Apple today announced that iPhone 6 and iPhone 6 Plus, the biggest advancements in iPhone history, will be available in China beginning Friday, October 17 from the Apple Online Store (www.apple.com), Apple’s retail stores, and an expansive network of retail stores through all three major carriers and Apple Authorized Resellers. With support for TD-LTE and FDD-LTE, iPhone 6 and iPhone 6 Plus provide customers access to 4G/LTE networks from China Mobile, China Telecom and China Unicom across mainland China. Customers can pre-order iPhone 6 and iPhone 6 Plus from the Apple Online Store beginning Friday, October 10. Beginning Tuesday, October 14, customers can reserve the new iPhones for in-store pick-up starting Friday, October 17.

Given the size of the three carriers, Apple has wide access to a market that reaches into the hundreds of millions of consumers.

There are a small number enemies that might keep sales of the iPhone 6 and iPhone 6 Plus from reaching sales of nearly 40 million in the quarter that has just ended. Among them are supply constraints, which Apple has struggled with before. Another is the popularity of Samsung smartphones that run Google Inc.’s (NASDAQ: GOOG) Android operating system. These are the only products that have had real success against demand for the iPhone worldwide.

Barron’s recently quoted an Apple bull who argues that iPhone sales may reach 40 million in the quarter just ended:

Mizuho Securities USA‘s Abhey Lamba, who has a Buy rating on the shares, and a $110 price, writing that “continued iPhone 6 momentum will lead to better than expected yoy revenue growth and new product introductions will further drive EPS estimates higher. We see material upside to current FY15 EPS consensus.”

For the fiscal Q4 ended last month, Lamba thinks Apple might deliver revenue of as much as $42 billion to $43 billion, and EPS of $1.42 to $1.44.

That would above the consensus for $39.989 billion and $1.30, according to Factset. That is based on the possibility of 40 million iPhone shipments in the September quarter, versus what he deems to be consensus for “high-30′s.

If so, the question about demand will have been more than answered.

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