Friday, March 26, 2010

Two weeks of iPad pre-orders: 240,000

Here's a two-week update: 240 thousand iPad units pre-ordered online for delivery (doesn't include reservations).

A quick recap: 190k first week, 120k first day.

Quick rates:
120k units on first day
70k/6 12k units/day over first week excluding first day
50k/7 7k units/day over second week.

One week to go.

Sunday, March 21, 2010

Revenue and growth prospects by product segment

This discussion inspired me to make a few charts. The data used for these are based on a trailing 1-year moving window of revenue by segment, which is why they come out so smooth without the December cycle spikes. Enjoy!

(click to enlarge)

Take the stuff beyond 2011-2012 with a grain of salt.

Thursday, March 18, 2010

History vs. current events

More charts!

This one shows the whole history of web order data I have, at the finest granularity available (between a week or two since 2005 and perhaps months before 2005). Data from 2001 to 2004 compiled by Steve Evans (aka Caligula). The value charted is the 30 day moving average of the daily rate, on a forward looking basis (i.e. the average for say April 1 to April 30 would be plotted on April 1 along the horizontal axis) in thousands of orders per day.

Here we see the blue line representing the same web order data, but aggregated on a quarterly basis, and also the data for quarterly revenue as reported by Apple (red line) and the ratio of Revenue/Orders (green line). Smoothing was applied because it looks really cool.

As for current events, it seems I've created some sort of controversy by reporting data that showed a steep fallout in sales velocity after the first day of iPad pre-orders, which was of course expected. Maybe some people are better off not knowing precisely at what level and how fast things reach a stable point and would prefer being told a big round number in a month or two, with no interest in the internal dynamics of an event driven launch. A suggestion, don't read these updates if you don't like such fine-grained data analysis, ok? Just wait until my pre-earnings report in mid-April.

It seems this image was a favorite among fellow bloggers. Here it's updated up to the latest order we have, for yesterday around noon Friday morning.

Now the thing with this image is that it shows the total number of web orders, not just those that include iPads, and there's no way of discriminating these through the factual data. But it's a nice image, and I'm not surprised that people are latching on to it. Now, as shown above I have a rich history of web order data going back years, and have several "sample datasets" for the month of March and for various types of product intros. What I've been doing in this case is assuming the week-long measurement of the rate just before the iPad was available for pre-order has been relatively constant except for a slight increase due to the higher traffic and interest, and subtracted this value from the observed rate.

Doing this definitely introduces some uncertainty, but there's no reason why the non-iPad orders should be getting more or less volume now, except a sensible proportion due to the increased traffic (someone came to the store interested in iPad, saw all the other goodies, and decided NOT to pre-order the iPad but to order something else). Notice that if someone decides to ADD other non-iPad stuff to their iPad pre-order it still counts as an iPad pre-order.

Well, there you have it. That's my update for the week: 180 thousand units pre-ordered online as of noon yesterday. [Update, 190k as of Friday morning, exactly a week after becoming available for pre-orders.] It obviously doesn't include store pickup reservations, nor will it include store sales after April 3 (if I'm still getting order submissions and bothering to track these). That's it. Based on this, and using my intuition and experience, and voodoo or however you want to call it, I'm sticking to my prediction of 1 million sold by mid-April.

As you can see, that conclusion amounts to not much more than my opinion. But the data in the first three graphs is factual, not opinion or estimates. Thus, my recommendation is that you come to your own conclusion as to how this might measure against expectations, both short and long term (although I would advise against putting too much weight into short-term market predictions) and decide for yourself, regardless of whether I'm right or wrong in my opinion-based prediction.

Thanks for all contributions.

Monday, March 15, 2010

Sexy model curves on iPad pre-orders

No this is not some spam post offering a pseudo-porn iPad app. Just go read my previous post to see what this is about. Also, don't miss PED's quoting my random musings on this stuff (and outing me! LOL):

PED: Apple iPad orders drop sharply

On to the "sexy" curves, click to enlarge (hey, some extra hits due to my title shenanigans can't hurt, and maybe someone somehow learns something new thanks to my mischief).

This one's pretty self explanatory. A nice, round rump evolves after 12 hours into a relatively straight line slightly sloping up. I'll just add that this slope will increase in the next few hours and days, that is, the line will curve in the opposite direction right about now (72 hours) and get steeper, and then it'll become straight once again for some time. Once we get past 100-150 hours, I expect a new, more subtle rump to form in which the slope will very slowly get shallower as the days and weeks pass.

This one's also easy to read. It's an attempt to measure the value of this slope over time (an approximation since I can't actually do infinitesimally small intervals), also called the first derivative, or rate of change. It simply represents the order volume rate per hour. Notice the sharp drop off early on and then it manages to maintain that small value for a longer period of time. The flat part here corresponds with the straight slope upwards of the previous curve.

Please don't pay attention to that harsh bump at 10 hours as it's due to a noisy sample most likely off by a few minutes from its true time value as recorded in Apple's servers.

Again, this curve will start to creep back up just a bit over the next few hours, and maintain a higher plateau for a longer period of time, and then after a few days keeping its ground it'll start showing a very slight decline only noticeable over much longer periods.

I'd also like to mention here that I left out a few points that would go in the tiny sliver of space between the vertical axis and that first point up there at 70 thousand. These points would plot much higher, higher than 100, and one of them was over 500 (that is, half a million orders per hour, but of course there never was half a million orders placed, just that the time span during which this happened was a minute or two, so 500,000/60 minutes lasting for a minute or so would generate something like 8-10 thousand orders).

The problem with including these points on the chart (despite them being really fun to look at) is that in order to show them so high up there, the zooming out of the vertical scale would have made the later part of the curve where it's more stable as if it was laying flat against the horizontal axis, thus potentially misleading one into thinking that the order rate just died. It did not die, it's oscillating a couple of times at around one thousand orders per hour without falling further, which is quite respectable for a weekend.

But that part is still really hard to see, like, those oscillations are important as they show the day/night volume patterns, and it'd be nice to get a closer look at those values. That's the motivation for the next chart.

I think this is the coolest one. Please ignore those two outliers at a value of 1, which correspond with that noisy sample I was talking about before. As to what the values on the axes mean, well it's just the logarithm of the same values plotted previously. Something similar would happen if you used log scales on both axes, except the normal values for hours and thousands of orders would show at different spacings.

To help you find your place there, remember that log(1)=0, log(10)=1, log(100)=2, etc. So, on either axis where the zero is, it's the 1 hour point in time or 1k orders/hour level. Where the 1.0 is shown, it's the 10 hour point, or the 10 thousand level, the 2.0 is where we'll get to the 100th hour or when the rate was 100k orders per hour (only during the first 19 minutes of sales, which is 0.32h and log(0.32) is right around -0.5 which is the left side of the graph so those very early orders are not shown). As to what this curve is saying, what it means, I'll leave it up to you to interpret. Why do the dots fall much more in line? What would it mean if future dots suddenly stop falling or start turning up? All I'm going to say is, don't think those last few dots where it shows a temporary recovery for a cluster of them near the right side of the curve are noisy data points. These points are several hours and thousands of web order numbers apart, so a couple of minutes off creates no noise here. And there are several dots plotted at the temporary recovery (during daytime on Saturday and Sunday).

Finally, this last graph (also shown in PED's article) is similar to the second one, except here I've only used a few points spaced out about 12 hours apart. A clarification is needed about the yellow label there which says "iPad sales" which should have said "iPad unit sales" so it's not showing $ sales. But the most important addition here is I show my estimated volume rates for orders that don't include an iPad pre-order.

Wow this turned out to be quite a long post. Sorry if you were expecting some hot chicks in bathing suits, but if you read all the way through here, I appreciate your effort and I'm glad I could keep your attention this far.

Stay tuned over the next week or two.

Friday, March 12, 2010

How many iPads pre-ordered?

We've been trying to estimate how many iPad pre-orders have been placed simply by counting web orders from user contributed web order numbers. I have more than 5 years experience working with these, correlating them to overall sales, and gauging product introductions.

It's not an exact science though. This web order sequence of course includes all Apple products sold through the US Online Store. But for today, this is relatively insignificant when compared to the iPad orders. The average daily order volume from January 16 to March 5 was about 16 thousand orders per day. From March 5 until the first order submitted after the store opened today it was about 14.5 thousand per day.

But today, that's a drop in the iPad bucket. The other products would account for 600 orders per hour, assuming the base rate continues the same. Yet for the first 6 hours since the store opened, we've seen the sequence increase by more than 88 thousand orders in total. That's the baseline daily volume, per hour! For the last 2 or 3 hours the rate has moderated to about 7 thousand per hour, from more than a thousand per minute in the first 15-20 minutes.

Additionally, an important proportion of iPad orders are for two units, which for now I'm counting as just one until I get a bigger sample.

I'll keep an eye on this rate and the estimated total over the next few weeks.

Thanks for everyone's submissions,