Apple's marketing may pay off with nearly $8 billion in revenue

One company that hasn't been cutting marketing budgets is Apple Computer, which was named Marketer of the Year over at MediaPost's Marketing Daily. And NPD released some new data today, showing that Apple increased its market share of the MP3 player market from 45% in 2005 to 57.5% in the five weeks around the holiday season in 2006.

Now this data has some notable omissions. Among them are sales from Wal-Mart (a big factor) and the Apple Stores themselves (a huge factor in iPod sales). And the data only covers five weeks, not the entire quarter.

Nonetheless, the data is probably somewhat representative of the quarter, so I did some estimates of the omitted effects. I predict that the Apple stores will be responsible for about 2 million iPod sales on their own, and Walmart will be responsible for another million or so (these numbers are pulled out of the air, so if anyone has better guidance on what I should use for those two estimates, leave me a comment or send me an email). So I plugged it into my model for Apple financials and iPod sales. And below is what I got:

Category	Units (in thousands)	Revenue (in millions)
Desktops	700	$976
Portables	1,200	$1,637
iPods	23,000	$4,106
Other (Software/iTunes/Periphs)	N/A	$1,220
Total	N/A	$7,938
Net margin	N/A	$760
EPS (basic)	N/A	$0.89
EPS (diluted)	N/A	$0.87

The bottom line: I was a piker in my previous prediction of 20 million iPods and $7 billion in sales for Apple's holiday quarter. Assuming that these numbers are somewhat in line, Apple may see a nearly $8 billion holiday quarter, with $4 billion of that revenue coming from the sales of 23 million iPods.

Full disclosure: I own a small number of Apple shares.

Technorati Tags: Apple, Finance, Financial analysis, iPod, iTunes, Marketing, Opinion, Projections, Stocks, Stores, Zune