This weekend Apple released they set a new Iphone sale record. The new Iphone 5s/c sold 9 million units compared to the Iphone's 5 million. Sales have surpassed analyst expectations and Apple said they are already low on inventory.
They released the phone in China which is an important market for Skullcandy. The Skullcandy headsets are designed to be used for smartphones, although they will work with anything, the more people with smart phones the bigger the market for Skullcandy.
The new Iphone 5s/c is a huge plus for Skullcandy headphones, NOT BEATS BY DRE. The Iphone5c is a cheaper version of the Iphone 5. This is a good product for college kids who need a smart phone but dont want to spend all they got. If you are looking to buy a cheap smart phone it is likely you are not going to go buy the most expensive brand of headphones, BEATS BY DRE, for $100-$350.
Apple has sold 9 million Iphone 5s/c's so far. Lets assume theres a 12% capture ratio, meaning for everyone who buys a smartphone will buy a headphone to go with it. Then lets assume Skullcandy has 10% of this market. Thats 108,000 units sold for Skullcandy. Multiply an average selling price between $20 - $30 and that results in $2MM-$3MM is revenue for Skullcandy or about 1% of their revenue for the year. Now that doesn't sound like much but the Iphone 5s/c has only been out for a week. Plenty of time to go.