Apple 2.0

Covering the business that Steve Jobs built

Asymco: Can the iPad sustain 150% yearly growth?

March 22, 2012: 5:20 AM ET

There is a precedent: iPhone sales have doubled, on average, every year since 2007

Dediu's Q2 2012 estimates. Source: Asymco.com

The chief difference between the independent analysts who follow Apple (AAPL) and their counterparts on Wall Street is that the independents put a premium on being right.

The professionals, with all due respect, seem to care more about not over-promising or straying too far from the consensus. (See here, here and here, for example.)

So investors who want informed guidance about what Apple is likely to announce when it reports its earnings for the second fiscal quarter of 2012, which ends next week, would do well to listen closely to Asymco's Horace Dediu, one of the best of the independents. Not only do his Apple forecasts regularly beat the professionals', but he explains how he gets his numbers clearly and in great detail.

On Wednesday, Dediu published his Q2 2012 estimates on Asymco.com and discussed them at some length on The Critical Path, his weekly podcast on Dan Benjamin's 5by5 Network.

Predicting how many iPhones Apple will sell, Dediu says, is relatively straightforward. Sales have been growing 100% per year, and based on his analysis of Apple's capital spending plans and his deep knowledge of the mobile phone market (he worked for Nokia for eight years), they seem poised to do it again this year.

Predicting iPad sales is far more difficult, he explains, because contemporary tablet computers are a market that Apple created out of whole cloth two years ago. But that market -- which Apple continues to dominate -- has been growing at the rate of more than 150% per year, and based on first weekend sales of the new iPad, Dediu now believes that rate may be sustainable.

The difference between the launch performance of the first iPad and the third, he points out, is a factor 28. Adjusted for the number of countries where each device was launched, that boils down to roughly 3 to 1.

Dediu is calling for Q2 iPad sales of 12.2 million. That's more than 1.2 million units higher than Wall Street's current consensus, but it's hardly the biggest estimate out there. This week, Citigroup's Richard Gardner and Evercore's Robert Cihra both issued notes predicting Q2 iPad sales of 13 million.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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