Apple Q3 2014 Fiscal Results Analysis

by Brett Howse on 7/22/2014 9:20 PM EST
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  • jjj - Tuesday, July 22, 2014 - link

    561 ASP is the lowest on record,calling it great is amusing.
    New iphone is without a doubt launching in calendar Q3 (fiscal Q4). Apple guided up and if there was nothing new the quarter would have been pretty hard down.
    There are a bunch of other things to be said here but who cares really.
    Reply
  • Brett Howse - Wednesday, July 23, 2014 - link

    I reworded it, what I meant to say was revenue from the iPhone launch won't be felt much in Q4 not that it won't be launched in Q4. Reply
  • jjj - Wednesday, July 23, 2014 - link

    There might be quite a lot.
    Last year the first weekend of sales for 5s and 5c was 9mil units,remains to be seen if this year there is a 4.7 and 5.5 inch in Q3 or just the smaller one and if the 5c gets updated. Actual features and supply matter too. There is also the inventory shift from old product to the new one(s) and the new ones have higher ASP so all in all the new product revenue will be quite a lot. Too early to say if it's going to be 6B or 9B but that's gonna be 15-20% of revenue for the quarter.(assuming 40-45B revenue -the higher range includes a few mil units of the 5.5 inch and some new ipads)
    Reply
  • NightSniper - Wednesday, July 23, 2014 - link

    Some revenue numbers are wrong with the article.

    "Revenue for the iPod was $442,000 which was down 40% from Q3 2013."
    I think you mean $442,000,000.

    "Ipod, with revenue for the quarter of $1.3 million which is up 12% over last year’s numbers."

    I think you $1.3 billion.
    Reply
  • Brett Howse - Wednesday, July 23, 2014 - link

    Yes sorry the summary data sheet has devices in thousands next to revenue in millions I obviously tripped up the columns! Reply
  • przemo_li - Wednesday, July 23, 2014 - link

    Maturity in tablet market?

    With 14% + growths industry wide?

    That is not maturity. :D

    Thats covering Apple poor performance (but hey, they are premium niche, so when whole industry slows down, they would feel it most, right?)
    Reply
  • xype - Wednesday, July 23, 2014 - link

    Yeah, that’s the thing with "industry wide", as the iPhone and iPad got released at the high end and filled up that market, while there is still room on the low end. The question is whether the growth in the low end that is fuelling the overall market growth is worth the trouble.

    I think it would be best to specify stuff like "mature market" with an asterisk explaining that we’re talking about the market Apple competes in (high end), not some fuzzy definition of an "industry".

    At the end of the day it’s profits that are important anyway—if Apple can manage to grow profits or keep their profit market share stable or growing, they’re performing well. If they have 0% marketshare in an area where profit-per-device is <$25 it’s not poor performance, but a conscious business decision (would be a bit like saying a major league team is not performing well because they only won the major league title and no local league games at all).
    Reply
  • uhuznaa - Wednesday, July 23, 2014 - link

    Apple's profits are mostly important for Apple, not for the users or third parties. And Apple can only continue to live off good margins in the "premium" segment as long as enough people actually pay these prices. When slipping marketshare starts to eat into mindshare Apple will have barricaded itself onto a shrinking island. I don't think that this will happen this year or next year, but sooner or later an ecosystem that covers only 10% of the market or so will stop to be attractive enough to pull the prices that Apple needs for its margins.

    Apple needs to be careful here. Of course it's fine to have only the top 10% of the market, but the question is if you can stay there then. Way back in the PC/Mac wars Apple did the same thing: Fat margins lead to plummeting sales and fewer and fewer people were willing to pay those prices for something that cut them off from where the rest of the world was going.

    OK, Apple is far away from were it was back then, but the "margins are everything" mantra has its limits.
    Reply
  • xype - Wednesday, July 23, 2014 - link

    Way back in the PC/Mac "wars"? Aren’t those still on, and how is Apple doing there?

    The thing is, unless a whole product category is replaced by another, you have to be silly like BlackBerry to really mess it up. It’s not an endgame scenario, even a 10% market share would work just fine. If anything, it might make the cheap knockoff/scam app developers move on to the bigger player, which would be a good thing.

    Apple didn’t stop making good quality products all of a sudden, and they likely won’t—and even if they to in 5-10 years, they’ll have amassed a huge amount of money by then, enough so to be able to even enter new markets with a Google-level of "throw shit at the wall and see what sticks" for a long time.

    Also, the mindshare is still there, no matter what linkbait articles and idiot analysts (and Samsung’s Marketing Department) would like to believe. Otherwise there would be no increase in sales across most departments. As it is, the fluctuations can still be explained by normal market dynamics.
    Reply
  • smalM - Monday, July 28, 2014 - link

    "Way back in the PC/Mac "wars"? Aren’t those still on, and how is Apple doing there?"

    Their profits with Macs are higher than those of Acer, Asus, Dell, HP, and Lenovo with PCs combined. The PC guys failed miserably to set up a sustainable business model.

    BTT:
    A fiscal results analysis which doesn't mention the expenses with a single world?
    Brett may need a little more practise... :-)
    Reply
  • name99 - Wednesday, July 23, 2014 - link

    There is a massive artificiality in how these categories are defined, which makes obsessing about them somewhat pointless. For example, the 'iPod" category contains three very different devices
    - the shuffle
    - the nano
    - the touch
    The nano is likely to be replaced with some sort of wearable, but that's an issue for later. My point today is, suppose I rebrand the iPod Touch as the iPad nano. Now the iPad category looks completely different. Are the sales in that category up or down? We don't know because we don't know the shuffle/nano/touch split.

    Thinking of the touch as the iPad nano is a whole lot more useful in terms of understanding how the product is placed, both to consumers and as engineered inside Apple. But you can't really compare that to anyone else because the "tablet" category as defined by other vendors doesn't have a nano section.

    If you want to run around claiming that the sky is falling, either for Apple or specifically for the iPad, you're welcome to do so. But it seems awfully premature to do so on the eve of the quarter that will bring us, almost certainly
    - a 2GHz or so A8 CPU (extrapolation from how process improvements usually play out)
    - new screen sizes (certainly for phone, perhaps for iPad nano)
    - at least one wearable (with who knows what implications for the desirability of iOS devices)
    Perhaps (who knows) a large screen iPad Pro.
    Reply
  • RavenMoon - Tuesday, September 02, 2014 - link

    Q: So, what does finance have to do with tech? The answer is nothing. What all these "tech" sites are doing is allowing the financial "analysts" to dictate what's going on in the tech world, as if money has anything to do with that, or that the "analysts" know their elbow from an orifice when it comes to tech. Guess what? It doesn't. They are just trying to make a name for themselves.

    Apple did not get formed *only* to make money. I'd suppose this is true of other companies as well, but thats not the current subject. Apple does not exist just to make investors money. They make computers, software, and other devices. This point seems to be lost in the current greed rampant world.

    So while we are speculating how much money they will make, or how many phones they are going to sell, blah, blah, blah, they are still considered the "most valuable company." ("Apple Now Biggest-Ever U.S. Company" - WSJ, August 20, 2014), and have a boatload of cash in he bank ($160 billion).

    All this other talk? It means nothing, and it's not "tech news." They will come out with new products, iPhones, etc, and do very well with them.
    Reply

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