Thursday, 26 July 2012

Apple Q3 2012 - for better or worse?

Yesterday Apple announced its figures for Q3 2012.I decided to have a good look at them, given the news and blog posts that flew around. Here are the clean stats:

2012 Q3

Revenue of $35.0 billion
Net profit of $8.8 billion
Gross margin 42.8%
26.0 million iPhones - 28% growth
17.0 million iPads - 84% growth
4.0 million Macs - 2% growth
6.8 million iPods - 10% decline

2011 Q3

Revenue of $28.6 billion
Net profit of $7.3 billion
Gross margin 41.7%
20.3 million iPhones - 142% growth
9.25 million iPads - 183% growth
4.0 million iMacs - 14% growth
7.5 million iPods - 20% decline

Good or bad, or anywhere in the vast grayscale in between? Let the data and graphs tell the truth...

For a proper comparison, let's take 5 years of history. The iPad doesn't make it through there, but all other Apple products do. Here's the figures for that:

Does there seem to be something wrong there? To the trained figure fetisjist, it does, I guess. Slightly less insane growth in sales, a wee in revenue, but profit seems to be stalling. Let's take the same graph and replace absolute figures by relative growth / decline, taking 2008 as a baseline:

There we have it!

  • Where the insane revenue growth slowed down a bit in 2011, it seems to have dropped dead - it's 25% of what it was last year
  • Not surprisingly, net profit suffered the same fate. But hang on - the growth there is only 16% of what it was last year, so Apple is either incurring more costs on their products, or making less margin - probably a bit of both
  • The iPhone 4 jolted the figures of 2010, but that effect faded off in 2012
  • iPads? Can't compare, but looking very healthy, that 845 growth
  • Macs are dead, no growth at all anymore
  • iPods have been on a decline for years now, but not dropping as hard as last year
The good news? Insane double-digit growth still of course, nothing to worry about. The iPhone 5 will boost figures yet another time, and statistically it's hard to blame the standstill of Macs on the rise of the iPad. Maybe the next iOS will fix that though, who knows. iPods? They've gone the way the Walkman went, and that's only logical with today's storage and functionality on a mobile phone

For the visual among us, let's top it off with two charts of the last two tables: first, absolute figures again

I had to downsize the crazy iPhone sales in 2009 to something that wouldn't dwarf the other percentages, so I picked 180%, being slightly more than the max of 175% in the graph. So, here are the relative growth / decline ones (remember I set all of 2008 to 100%):

So, what is the outlook for Apple? One more table then, where I compare the Revenue growth to the Net profit growth. In theory, or rather, ideally, profit growth should always be higher than revenue growth, even if you lose on both: otherwise you are producing at relatively more cost. Here's that then:

Slight dip in 2009, and now again in 2012: relative cost has clearly increased. Dropping iPod sales could account for the latter, as the fixed costs are still there, and demand is increasingly decreasing year-over-year. But let's just ignore them, like the stable Mac sales that lack growth.
It's likely that the iPhone 4 cannibalised some of the still on stock iPhone 3, and Apple had to take a fat write-off there at some point. After all, who wants an iPhone 3 these days? Not many.
It's also likely that the relative margin on the iPad is less than the one on the iPhone.
Or it could be the salary increase in China

It could be anything really, and we'll just have to wait for Q4 to know what exactly it is. In the meantime, whatever Apple touches still turns into gold - it just shines a little less bright than last year

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