Can Apple keep setting new iPhone sales records?

In a few short weeks, the iPhone 5 should be upon us. One of the interesting metrics that has been talked about of the iPhone is how all new models effectively outsell the cumulative total of prior models. For example, the iPhone 4 sold more than the total of all original iPhone, 3G, and 3G models.

So far the iPhone 4S has not yet reached this goal, but it will by the time next quarter’s results are reported. By my estimate, after 3 quarters of sales, Apple has sold about 83 million of the iPhone 4S compared to 88 million of the iPhone 4.

Here’s a chart showing how many of each iPhone model Apple has sold to date. The totals add up to Apple’s reported numbers, but the splits are based on an educated guess. My assumption is that when a new model is released, the vast majority of shipments are for the new model. Not really rocket science.

So the obvious question is, “Will the iPhone 5 ship more than all cumulative shipments of older models?” But the obvious question isn't always the right one.

First of all, it’s a moving target since older models continue to sell. Second, each new model of the iPhone is facing a larger cumulative base of sales that it has to compete with to establish this record. Third, we need to remember that it’s easy to beat prior shipment records when a product is newer, and very difficult once a product matures.

As an investor in Apple, I don’t really place a lot of importance on how many new models ship versus old models. I just want to see rising sales and steady profit margins. I care about total iPhone sales growing each year. I realize that it’s impossible for Apple to continuously release a new model that outsells all prior shipments of older models. Expecting this is akin to expecting a sprinter to continue to accelerate while racing up a slope that keeps getting steeper.

So let’s take a look at iPhone shipments by quarter. Here’s a chart that goes back to the initial introduction of the iPhone. I’ve thrown in iPad shipments as a second series on the chart just for the sake of interest and comparison.

You can see the huge spike in iPhone volume when the 4S was released. Part of this can be explained by the growing market of people who want an iPhone. But another contributing factor was the long (5 quarter) period of time that the iPhone 4 carried the torch. Anticipation for the next model was hot, and as a result, we saw a massive step change in volume when the 4S was finally released.

When the iPhone 5 comes out, we’ll have only seen 3 quarters where the prior model (the 4S) was the top of the line Apple phone. It seems natural that this would result in a less dramatic uptick in sales in the December quarter, right? Maybe. But when we consider that the demand for iPhones is still growing rapidly and globally, maybe not.

Let’s look at analyst estimates. I don’t have any Wall Street analyst models showing a forecast breakdown of iPhones specifically, so I’ll just consider revenue estimates. These are easily seen at Yahoo Finance.

For the December quarter, analysts expect Apple to generate $54.9 billion in revenue. This compares to the prior record (last year’s iPhone 4S holiday quarter) of $46.3 billion. That’s expected year-over-year growth of only 18%.

I wouldn’t be surprised in the least if Apple shatters the December quarter estimate. Their products are still the best in the world, China is on fire, and it looks like iPad volumes are growing like crazy, which just makes the 18% growth expectation seem like less of a hurdle.

It sure looks like Apple customers and investors are in for a hugely interesting fall of 2012. iPhone 5 in September, iPad mini in October, and hopefully an update from Apple on the number of devices sold at launch, and then quarterly results.

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