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Every quarter Apple’s management issues a “guidance” or forecast of their own earnings in the following quarter. Over the years, this figure has been nearly useless because not only is it not accurate, the error itself has been wildly variable. I plotted what I call the Earnings Guidance Deficit for Apple based on the formula (Actual EPS diluted – Guidance)/Guidance.
The higher the value in the bars above, the more the company underestimated
My thanks to Koombea for sponsoring this week’s posts and feeds.
Koombea designs and develops mobile and web apps for clients. They’ve mostly been serving startups in tech incubators such as Y Combinator, TechStars and AngelPad. The results have been good enough for clients to raise a combined $50 million in early stage funding during the last 18 months alone.
They’re also applying the same methodologies while working on mobile projects for larger companies like Motorola and BMC software.
They have a lot of experience building and shipping iOS, Android and Rhodes apps.
They’re also avid readers of Asymco and getting to know the audience through comments. If you have projects requiring their type of expertise (and even if you don’t) consider reaching out and talking to them via koombea.com.
I recently posted a comparison between the profit capture of phone vendors in 2007 and the most recent quarter:
The idea was to show what a disruption looks like. A phenomenon where an entrant with none of the advantages of incumbency takes the profits away from companies privileged with ideal market access and knowledge.
The view of profit shift is the ideal view since it shows the “bottom line” impact and thus the denouement rather than more nuanced sub-plot. However, we don’t always have access to profitability data. Sometimes we only have access to revenue estimates.
Fortunately revenues have a similar story and are often a good proxy. Consider how the evolution of revenue shares occurred in the same market:
In the recently posted US Smartphone Landscape I used comScore’s data to paint a picture of the growth of smartphones in general and the shape of the mobile platforms in the US. The source was survey data measuring the installed base. If we compare the installed base sequentially, we can get the increase (or decrease) of a particular platform. Comscore reports monthly but we can also summarize the data at a quarter-by-quarter basis.
There is another source however for the US market, at least for the iPhone: operator activations. They report iPhone activations, shown below.
Can we use activations together with installed base data to learn something about the market? Yes, with some caveats.
This is the cascading view of Apple’s financial performance in the third calendar quarter. It only includes information that is already in the income statement but shows the relative growth of the individual product lines, their cost structures and the relationship between fixed (Operating) expenses and their variable (cost of sales) expenses at a glance.
In the past I would publish current and year-ago data, but in this quarter’s summary I present three years’ history of quarterly data. Note that the full view is quite large (2,220 x 886 pixels).
Here are some handy tips on how to read the chart:
The scale of the chart is shown by the line near the top representing $30 billion.
