The Tipping Point of Apple: Indications of the 4Q Financial Earnings

27 Oct

To the anticipation of many, Apple revealed its fourth quarter fiscal earnings on Thursday. While CEO Tim Cook was reportedly pleased with the overall numbers, going as far as to describe what he saw as a “fantastic fiscal year,” not every analyst and observer appeared to share the same level of enthusiasm.

To summarize, the Cupertino company made a total of $36 billion USD in revenue and earned $8.2 billion USD profit. According to USA Today, the former figure exceeded expectations from Wall Street’s financial analysts, who predicted earnings to be in the $35.8 billion USD range. The reported profits, though, indicated the earning-per-share to be at $8.67 USD, which is short of the $8.75 figure that the folks at Wall Street originally expected to see.

As far as individual categories go, the iPhone’s market performance by far showed the most favorable results; a total of 26.9 million units were sold during the quarter, representing a 58% growth compared to the same period of last year. The iPad sales, on the other hand, amounted to approximately 14 million units (a 26% growth YoY), whereas iMac sales totaled 4.9 million units (a 1% increase YoY). On the slightly disappointing end is the performance of the iPod, which sold 5.3 million units, approximately 20% less than the figure from the same quarter of last year.

First, a point regarding the problems and the not-as-expected numbers. The iPad sales, while showing positive growth, is noted for failing to reach the initially estimated 17-19 million figure. One of the possible culprits identified as contributing to this situation is the anticipation surrounding the iPad mini, which arguably encouraged consumers to go into waiting mode before purchasing any Apple brand tablet. Another major reason, as some have pointed out, is the rise of legitimate competing products like Google’s Nexus 7 and Amazon’s Kindle Fire. Both products have been doing relatively well, sales-wise, since release, and have been making a respectable run within a market that is traditionally dominated by Apple.

With regards to the iPod’s dwindling growth, while the future is far from an entirely pessimistic one, there is little doubt that the product will have a tough time enjoying the type of glory and dominance that it once had. With the iPhone and other smartphone products continuing with their surging impact, some believe that Apple’s portable MP3s might end up in a smaller, less influential market, perhaps one appealing to those who are not interested in owning or purchasing a smartphone.

As for the iPhone, while the fiscal quarter numbers certainly look remarkable, there has been arguments indicating how factors such as supply chain problems, production slowdowns (allegedly involving the easily scratched cases), and the iPhone 5 launch all prevented the the quarter sales figures from being as strong as it could have been.

For the upcoming 2013 quarter, Apple appears optimistic about what it can accomplish, with Cook reportedly estimating $52 billion USD in earned revenue and an earning-per-share of $11.75 USD, according to Gigaom. The impending holiday shopping season, the new lineup of Apple products, and the expected increase in iPhone 5 sales are all expected to contribute to the improved earning figures. At the moment, the estimation is that iPhone sales may reach to 45 million units, whereas for the iPad (iPad mini included), sales will amount up to around 20 million units.


Fiscal Year FY1Q11 FY2Q11 FYQ11 FY4Q11 FY1Q12 FY2Q12 FY3Q12 FY4Q12 FY1Q13 (Estimate)
 (unit: K)  4Q10  1Q11  2Q11  3Q11  4Q11E  1Q12  2Q12  3Q12  4Q12
 Mac Desktop      1,227      1,009      1,155      1,278      1,479      1,199      1,010         968                       1,065
 Mac Portable      2,907      2,751      2,792      3,616      3,719      2,818      3,010      3,955                       4,351
 TTL CPUs     4,134     3,760     3,947     4,894     5,198     4,017     4,020      4,923                       5,415
 iPod    19,446      9,017      7,535      6,622    15,397      7,073      6,751      5,344                     11,757
 iPhone & related products and services    16,235    18,647    20,338    17,073    37,044    35,064    26,028    26,910                     45,200
 iPad and Related Products and services      7,331      4,694      9,246    11,123    15,434    11,978    17,042    14,036                     14,200
ipad mini                       6,900
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