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Estimates for Apple's fourth fiscal 2012 quarter [Updated]

As the chart below shows, the last quarter (second calendar 2012, third fiscal 2012) was disappointingly moderate with 20% earnings growth and 23% net sales growth.

It was the first quarter since the iPhone launched that earnings growth has fallen into moderate (below 30%) territory. Much of that disappointment (to me) was the relatively low performance of the iPad following a launch quarter. The iPhone was weak as well, though that was expected.  As I said last quarter, the iPhone is still the most important component but the iPad is becoming increasingly decisive in overall performance. In fact, I’m projecting that the iPad will have the same revenues as the iPhone had one year earlier.

The iPhone is going to be extremely difficult to project. On one hand we have the launch of the i5 which will account for about 10 million units in the quarter, on the other, chances are that sales were very weak prior to the launch as purchases were being deferred even more than during the last quarter.

So with these very meager clues, here are my estimates for the quarter (with y/y growth in parentheses):

  • iPhone units: 27.8 million (62%)
  • Macs: 5.6 million (15%)
  • iPads: 18.8 million (69%)
  • iPods: 5.6 million (-15%)
  • Music (incl. app) rev. growth: 40%
  • Peripherals rev. growth: 10%
  • Software rev. growth: 15%
  • Total revenues: $39.5 billion (40%)
  • GM: 42%
  • EPS: $9.75 (38%)

This earnings value would imply a trailing twelve months’ EPS of about $45.2. At the current price of $697/share the P/E would be 15.4. Cash and equivalents will probably increase to $125 billion or $131/share. Excluding cash, the P/E would be 12.5.

[Update. The EPS figure above includes a tax rate estimate of 30%. Company guidance was 25.5%. Using the company's guidance yields an EPS of 10.43. TTM EPS becomes $45.9/share and at $697 the PE is 15.2. At time of this update the share price has fallen to $665 and thus the pro-forma trailing P/E ratio is 14.5).]

  • themappertracker

    Hi Horace and others,

    slightly off-topic:

    what do you think of the iOS 6 maps ‘desaster’? I think this would not have happened if Steve was still around!

    http://theamazingios6maps.tumblr.com/

    http://www.reddit.com/r/technology/comments/106rvw/new_ios_6_apple_maps_app_angering_users_and/

    http://news.ycombinator.com/item?id=4548071

    • http://www.asymco.com Horace Dediu

      As with all scandalous disasters, ask me again a month from now.

      • FalKirk

        Great advice (seldom taken).

      • http://info-tran.com/ Info Dave

        Map-gate, it started here folks.

    • actualbanker

      This is exactly the sort of thing that would’ve happened with Steve around, if that’s even a meaningful thing to say.
      Apple and Google have divorcing as fast as they can.
      Apple wants to control it’s destiny and offer a better user experience. They’ve taken a risk, but the same as Siri, they have to offer what they have. And then get it improved by useage. Google has had maps for years… Apple is catching up.
      “Steve” (the concept) might have done this earlier.

      • http://www.asymco.com Horace Dediu

        Getting married to Google was also something that happened with Steve around.

      • tradervic

        And even worse, letting a squirrel into the board room to hear of Apple’s future world domination only to let him go buy Sidekick and create Android etc, when he got the playbook.

      • stevenjklein

        Google didn’t buy Sidekick. The Sidekick was made by a company called Danger, which was bought by Microsoft in 2008.

        Google got Android by buying a company called Android, Inc., in 2005.

      • http://twitter.com/pixxa Perspective

        While we all had high hopes for the newlyweds in 2007, but theirs may have been more a marriage of convenience against the king of Desktops. Perhaps things would have gone better had it not been for their promiscuous child named Android.

        Regarding Maps, Complaints so far have been about accuracy. It is not a surprise (what better way for people to show their superiority over the multi-zillion-dollar operation) and a temporary problem. If they were to crowdsource this by adding a “What? You are *not* Here?” button, this can be fixed in months if not weeks. Note that unlike Google, Apple knows clearly who you are, where you are, where you live, and even your credit card and phone numbers. Apple can trust its crowds a lot more than Google can trust its crowds.
        The next test for Maps is coming up now, as real users start upgrading to iOS 6 and those millions of iPhone 5s and iPod touches turn up in droves, i.e., next few days. This is a scaling issue, and Apple has not always been great in this area. Keep in mind, however, they have done fine at times (e.g., iTunes, apple.com) and that as a transactional system mobile.me/iCloud is probably harder to scale than Maps or iTunes.
        Maps also signals toward “retina-only” direction–a motivation for leaving bitmaps is that retina images are expensive resource hogs. Even so Maps makes iPad 3 look “not good enough”. All vintage Apple behavior… This signaling again brings to question of whether Apple will invest into a “low-end” iPad mini. Simply put: will the iPad mini support iOS 6? Will it support Maps? If so it will likely need more than a low-end CPU and may sport a retina display. Otherwise it will not quite meet the terms of the Cook Doctrine.
        Overall, replacing Google Maps may be the most serious move against a defacto-software-standards Apple has made since Jobs penned Thoughts on Flash. And a lot more users are at stake with Maps. It is a courageous, strategic move. Apple’s move will likely shake up the maps scene which has stagnated as of late. (Judging from defensive announcements by Google Maps and the Amazon Maps SDK, the transformation may have already begun.)
        Steve Jobs would have been proud.

      • http://www.facebook.com/joseph.carducci1 Joseph Carducci

        The crowd-sourcing idea is wonderful. It would fix the system and make it fun for some users, a kind of global game of hide-and-seek:+) Also, since Google is a Safari tap a way I doubt it will alienate many.

      • unhinged

        Dan Moren’s massive iOS 6 review (http://www.macworld.com/article/2010065/review-refined-ios-6-highlighted-by-stunning-maps-overhaul.html) points out that there is such a function already:

        “Apple has at least provided a way to indicate when something is incorrect: Swipe the page curl and then tap the small Report A Problem link above the Print button; the subsequent form provides a variety of different ways to correct the listed information.”

      • actualbanker

        Agreed. But never mind waiting till millions of people own the new iPhone. All the 4 and 4S owners are already contributing as of today. Apprently we’re at 15% adoption on iOS 6 already. So by the time a regular person gets and iPhone5 (October, November, December), it will probably have improved significantly.

      • aaarrrgggh

        Personally, I like the new maps. The accuracy thing is a little of a question mark, and the fact that street names in other countries don’t offer romanisation (despite it being printed on street signs) is an immediate problem for me. But, the flyover is really cool, the speed is solid, and the problems would likely improve over time.

        There are plenty of other bugs to go around though (wifi in particular), but this has never had a material impact on Apple and I doubt it will again.

      • alexkhan2000

        I often wonder how and why Jobs missed this with Google/Schmidt just like he did with Microsoft/Gates. Although the two industries and their eras are completely different and Apple is doing quite well compared to the PC era, it strikes me as one of the few glaring blunders that Jobs made during his second reign at Apple.

        Did he trust Schmidt? Clearly, he already knew that Google had Android when developing the iPhone. Did he believe that Schmidt just wouldn’t use his inside knowledge as board director to come up with something very similar competing technology for Google?

        As prescient as Jobs has proven himself to be over and over again, it puzzles me that he allowed Google to run away with Android as it did. By the time Jobs declared “thermonuclear” war on Google, it was already too late. The cat got out of the bag (or the Pandora’s Box opened) and we now have what we have – which is not what Jobs and Apple would have liked to see despite the tremendous growth and success of the past 5 years.

      • http://search.websonar.com:8080/ Duane Bemister

        I think history will show that Android will actually have created a positive outcome for Apple by introducing pocket computing to a huge audience that Apple would not have been able to reach, or wanted to; who will eventually move to the Apple ecosystem.

      • http://search.websonar.com:8080/ Duane Bemister

        I think history will show that Android will actually have created a positive outcome for Apple by introducing pocket computing to a huge audience that Apple would not have been able to reach, or wanted to; who will eventually move to the Apple ecosystem.

    • FalKirk

      “what do you think of the iOS 6 maps ‘desaster’?”

      Not good, but hardly a disaster.

      “I think this would not have happened if Steve was still around!”

      Nonsense.

      In 2008, Apple introduced the new MobileMe, iOS 2 and the iPhone all in a single day. Now THAT was a disaster. The phone lines were clogged up all day. People couldn’t disconnect their phones without bricking them. Many MobileMe customers lost valuable data.

      Who was in charge of the company then? Why that would have been one Steve Jobs.

      Do you remember that disaster? No? Neither does anyone else. Apple cleaned up their mess and moved on. So will we all.

      • cellojoe

        as long as the browser can still navigate to Google I really don’t see the problem. more importantly, it’s hard to imagine it being a dealbreaker even if the maps were completely dysfunctional.

      • http://www.facebook.com/joseph.carducci1 Joseph Carducci

        Thanks for the historical perspective. What’s more, it seems unlikely thata product launch this momentous would be “disaster” free I cannot imagine a company as scrutinized as Apple bringing something out of the gate without one or two alleged catastrophes.

    • Sacto_Joe

      I would characterize it as a hyped issue and not as a “disaster”. I haven’t used it on a phone (I have a 4), but I like it on my iPad. I think the 3d is cool, BTW!

      • Jonshf

        It’s quite obvious that the app is good and it works well in those areas where the data is good. The problem is that huge areas of the world are almost non existant in the database.

        It may not be a disaster but it is a fiasco and not up to the standards we expect (and pay for) with Apple.

      • Jonshf

        It’s quite obvious that the app is good and it works well in those areas where the data is good. The problem is that huge areas of the world are almost non existant in the database.

        It may not be a disaster but it is a fiasco and not up to the standards we expect (and pay for) with Apple.

      • Tatil_S

        Well, if the tumblr page is any indication, “almost non-existant in the database” means more like some POI’s are mislabeled (Exxon office labeled as gas station, a stadium labeled as a park etc.) and there are missing train and subway stations in Europe. Not even a fiasco really, but merely sub-par. A bigger deal than antennagate for sure though.

    • Sharon_Sharalike

      Hardly a disaster. And maps will quickly improve as people use them. As for the “Steve’ comment, can we please put that to rest? I wish to postulate a corollary to Godwin’s Law. Namely, The longer a discussion of Apple strategy grows, the probability of someone purporting to know what “Steve” would have done approaches 1.

      And finally, it was not all Apple’s doing that Google Maps is no longer built in. The agreement expired and they could not come to terms. You may have noticed that the YouTube app is also no longer built in. And it has actually been good for Google. Their new YouTube app allows them to show ads.

      When their Maps app is released (they have yet to submit it) no doubt it too will allow them to profit in ways they could not before.

      • cellojoe

        is there anyway to gauge exactly how fluid and effective user correction of the map system will be? if we have a robust idea of what the machine learning protocols are, who compiles the data etc. we could start to understand how quickly this will improve

      • Sharon_Sharalike

        Mapping is a complex and difficult thing. People in the field dedicate their careers to it. We’re not going to get that information, but it’s not as if they could just say “we do xyz” and then we could see how long it will take. It’s too hard.
        If you really want to try to estimate it, start by taking some data. Determine a representative mapping sample, then track it over time. Note the changes and improvements. Determine rate of change, and if it’s accelerating, plateauing, following a smooth curve, or if it’s simply chaotic. That would be a good first step.

      • cellojoe

        I imagine that data on the improvements of Google and other mapping services is available. We could extrapolate from that perhaps. but of course, the other mapping services had all of these automated helpers running around the world as I understand it.

        it seems to meet that Apple maps is relying on device traffic. a device goes to a location, they learn about it.

        question is: how seamless could that learning be? if I go somewhere is any aspect of my device comparing the maps data to whatever it observes?

        my fear is this: users will lose patience either with the program or the device itself. then there won’t be enough information coming in to facilitate improvement. maybe they could get things going by offering free iTunes material for anyone who updates locations

    • handleym

      Like so much, it is worth actually looking yourself rather than relying on the opinions of others. What I saw was that some things (which I care about) have been substantially improved, in particular traffic.
      – The 3D display is (IMHO) substantially more elegant than Google in the way it delivers crisp data right away rather than progressively refined geometry and texture.
      – Apple appears to either care more about, or have a better algorithm, for matching imagery tiles from different sources. There is rather less of the glaring color mismatches you see in Google. (To be fair, this may perhaps reflect fewer data sources?)
      – The basic functionality (see the map, see my location, route me) IS actually there. This seems obvious but to hear some people say it, Maps is USELESS, USELESS I TELL YOU.

      Obviously there are also many problems. The 3D mismatch problems are comical but unimportant. More ground imagery would be better. But most problematic are
      – searching sucks
      – the public transport issue

      I’d say, like anything, the sensible response is to look at the big picture — where is this going, not where are we today. There are few individuals who are going to abandon Apple because of this, as long as the problems are improved. So, let’s think about this:
      – the underlying tech definitely seems there. The display works, it’s fast, the servers didn’t collapse on day one. The hard coding problems are solved. What remain are data problems.

      – searching COULD be solved soon if Apple can’t do it alone fast enough. How. By signing a more or less secret deal with Bing, for a year or two. Route the queries to MS, get the geo-location back. So I assume that WILL be solved, one way or another, in the nearish future.

      – the biggest long-term problem (really the only long term problem) is the public transit routing. let’s face it, Apple’s solution here sucks, and unlike everything it’s not going to stop sucking over the next year — the basic UI model sucks. Which means what? Apple may feel this is just not an important problem (and may perhaps be correct). Maybe we will all have Google Maps on our phones for this single task?

      But that’s my conclusion. Looking at the big picture, I’m amazed that Apple did as well as they did for such a large project. I expect pretty much all the problems to be fixed within six months or so. (At least in the US. Sorry for the rest of the world — you may take two years or so to really come online.)
      But the only thing I think REALLY worth complaining about is the Public Transit stuff, which is an unequivocal step backwards, and doesn’t seem likely to be fixed soon.

  • cellojoe

    I think many were surprised by the relatively “low” iPad numbers last quarter. I attributed this sadly, to the new IPad slightly over serving the market. I believe the ipad2. may actually be outselling the three. Have you ever looked at web traffic signatures for the various versions? this seems to confirm the worry.

    • cellojoe
      • r.d

        bull.
        that page hasn’t updated since May.
        all the states number are completely missing.
        Chitika is good at press releases than providing correct numbers.
        try netmarketshare tablet market share page. see how fast it is rising compared to iphone.

    • FalKirk

      “I attributed (the low iPad numbers) … to the new IPad slightly over serving the market.” – cellojoe

      I wouldn’t say it over served the market. The new retina screen required more battery and made the new iPad both larger and heavier than its predecessor. This is unheard of for Apple. I suspect that, with a year under their belt, Apple will be able to make the 4th iteration of the iPad both retina, and at least as small and light as the iPad 2.

      The iPad 3 may have been a necessary aberration – we’ll just have to wait and see.

      • http://www.facebook.com/scottjsterling Scott Sterling

        Respectfully, any notion that the general public knew or cared about the fact that iPad 3 got half a whisker thicker is just silly. Only us techies know about that stuff.

        You’re going to have to come up with a different explanation if you think there was an aberration in sales.

      • FalKirk

        Really? I would normally agree that the general public does not know or care as much about we tech heads do. But the new iPad was costlier, thicker and heavier and it’s major advantage was the retina screen, which most users could do without.

        I think people might have opted for the cheaper, lighter, smaller non-retina iPad because it was “good enough”.

      • capnbob67

        John, I would severely doubt that the iPad2 even close to outsells the iPad 3. It would be the only iOS product where the “base version” is the higher seller. For all intents and purposes the iPad 3 was the same in all the respects you mentioned. Price – same, Weight – within 5%, width – within 5%. These are almost imperceptible changes to consumers. I can barely tell. The big changes were Retina and LTE – anyone can easily perceive those
        The reduction in price of the iPad2 only $100 and only having a base model is like dropping the iPhone 4S price when the 5 arrives or having a iP4 8GB only for the cheap end. Doesn’t seem to slow the 5 sales down.

      • FalKirk

        “I would severely doubt that the iPad2 even close to outsells the iPad 3.” – capnbob67

        I did not mean to suggest that the iPad 2 outsold the new Ipad. I was just speculating about whether the new iPads sales numbers were slightly depressed because of the very un-Apple like way in which it was both larger and heavier than the iPad 2.

        It’s all speculation anyway. I’d much rather have hard numbers to work with.

      • KirkBurgess

        With iOS 6, the difference between the 2 are now even more pronounced (Siri, flyover maps etc are iPad 3 only).

      • http://www.facebook.com/scott.minehane Scott W Minehane

        Actually the LTE offering on the IPad3 was incredibly limited and made it only useful in the US (ie totally unable here in Australia). This is unlike the Iphone where Apple learnt their lesson and launched the LTE for the Iphone where it is much more usable (not everywhere but getting close). I am surprised that Apple had not offered an incremental upgrade to the Ipad3 making it usable in more non-US markets but maybe that will happen with an Ipad mini launch (if there is one!).

      • aaarrrgggh

        I would say it is much simpler; the primary market for the New iPad was early adopters of the original iPad. It didn’t provide a huge incentive for iPad 2 owners to upgrade, and new purchasers were likely split between the two products. Longer term though, I don’t think it will be an issue. Use Cases are increasing dramatically which leads to a healthy long-term market.

        As for iPhone units, I think the number is too low; the previous pre-refresh quarter was 17MM units, and if you add 10MM units from the 5 you are just barely hitting that number. I would be surprised at a number less than 30MM.

      • Joe_Winfield_IL

        I’m very curious about the shelf life of iPads. I think the subsidies on smartphones are a big factor in the two-year upgrade cycle. Users know they can buy new every two years for $200, but that anything quicker will draw a penalty from the carrier. For many, the scheduled desire to upgrade is almost Pavlovian. There is no equivalent trigger for iPad users to upgrade, and in this regard it is analogous to the iPod. The iPad needs to find new jobs, or it risks becoming the device that never gets upgraded.

        I think next year will be telling. It’s probably a safe bet that the 3rd generation iPad will go the route of typical n-1 Apple products and sell for a $100 discount to the current flagship. What will be the major innovation or incremental improvement that differentiates a $400 retina iPad from a $500 version? Battery life is good enough already, and I don’t think speed is a major hindrance today. You can get iOS 6 even on the iPad2, so I don’t think software will drive sales.

        Also, what will happen if/when Apple releases the 8″ iPad that has the internet so excited? Presumably it will drive sales volume, but at what expense to the full size product? Clearly, an iPad mini will need to be differentiated – not just less expensive and smaller.

      • KirkBurgess

        Don’t be so sure that the iPad 2 & 3 will stick around next year. I think it’s much more likely to be iPad mini at the low end ($299-$399) & iPad 4 at the middle/high end ($499 and up). The iPad lineup may very well become more like the macs & iPods with different product lines at differing price points, rather than the iPhone line which has n-1 models at lower price points.

      • aaarrrgggh

        I think you will see a 2.5-3 year refresh cycle for people on the iPad. Mine was upgraded after 2 years (~25h/week use), but my wife will wait until the next generation (~5h/week use). Once my wife learns to use it rather than her laptop more, it will likely see faster refreshes.

        You do need a compelling reason to upgrade though; an 8″ tablet would likely split our upgrades, with the wife going to 8″ this cycle and holding on to her iPad until the bitter end.

      • http://search.websonar.com:8080/ Duane Bemister

        Business customers want a larger more powerful iPad to run pc quality (jobs to be done) apps. It’s all about the apps. It will be a long time before the iPad is “Good Enough”.

      • Martin

        Apples pricing rule of thumb works both ways. $1/day puts iPad expected life at 2-3 years per their expectation. The iPad 1 was a weak product with not enough growth headroom in RAM/CPU which is why it’s fallen off after 2. The 2 has quite a bit of headroom but the non retina display will seem old pretty fast. The 3 has good headroom except for GPU intensive stuff as it can barely drive the display. Probably at least 3 years for general use.

        The iPhone 5 is the most overbuilt device yet. I imagine the iPad 4 will be close.

      • alexkhan2000

        A lot of people besides us tech nerds are/were aware that the new iPad is heavier and thicker than the iPad 2. Heck, even my mother in Korea knew about it and that seems to have had an effect on her not buying one even though she has an iPhone and an iMac. I skipped the new one and am still very happy with the iPad 2 myself. The Retina display is great but the iPad 2 display is still more than adequate for most tasks.

        Personally, I’d like the iPad to be somewhat lighter than the iPad 2. I don’t think it needs to be really any thinner. You’d want some girth that you can grab on to. It gets a little tiring to hold after 15 minutes or so – like standing to read something on it in a crowded subway train in Seoul.

        That being said, the iPad still defines the entire tablet category. One interesting thing I observed while traveling through Asia is that while going through the airport security, the personnel there would ask me if I had a notebook computer or an iPad in my bag, not a tablet. I just say, “I have both” and take them both out to put on the tray going through the X-ray machine.

      • https://twitter.com/#!/azulum azulum

        Considering the iPhone 5 matches the performance of the 3rd iPad, I’d say, definitively, that generation was an aberration.

  • MR

    Mac projected growth seems high. The new MBP’s should help, but haven’t we been seeing school (or back-to-school) sales impacted by iPad? Also, iMacs are less important to overall numbers, but do you think overall growth rates for Macs may be hindered by impending refresh?

  • http://twitter.com/twocolddogs Al Rumball-Smith

    It’s a really interesting quarter, as the implication is now that even the non business and non blog reading population is up to speed with Apple’s yearly release cycle for the iPhone. When Joe Public is aware that they shouldn’t buy a new iPhone in the 3 months prior to September then that’s a significant change from a couple of generations ago. The peak of sales “fixes” this, but the mini-Osbourne effect is definitely there now. There is increasing pressure on Apple to produce a new iPhone each year to justify the 3 month wait time that average consumers are now happy to endure.
    EDIT: to take this a step further, you could potentially infer that if Apple does release an earlier iPhone 6 then they’ve lost confidence that the hardware is sufficiently better to appease customers who waited.

    • unhinged

      I don’t think such an inference is warranted. It might just be that Apple wants to break the 12-month release cycle, and rather than suffering through an extended period of lower sales it chooses to release early to regain its preferred perception of being unpredictable.

      • http://policydiary.com/ John S. Wilson

        I agree. I also don’t think it makes sense for Apple to wait 12 months to refresh the iPhone. I think a 6-8 month cycle would be adequate. Imagine the 5 dropping to $99 in, say, June and a new iPhone coming out? Competitors could not challenge a free 4S, nor a reduced cost 5. And Apple’s market still needs to be focused on those customers who have yet to purchase one. Geeks like us will sell our old hardware and reup when convenient. Other 5 owners will skip the next upgrade because they’re satisfied. It’s no lose scenario.

  • Sacto_Joe

    Do you have an estimate for this quarter of how the iPhone segment would break in terms of iPhone 5 vs earlier models? Actually, I guess I’m more interested in your guestimate for earlier models, which would allow me to plug in my own guess as to how many 5’s will be sold this quarter.

  • Sacto_Joe

    To me, the intriguing number is the projected P/E of 15.4 after earnings are announced. A year ago, I was certain that P/E compression would drop that number to 11 or even 10. Clearly, P/E compression for Apple has now been shown to be a function of earnings growth. In January, Apple hit a two year high P/E of 18.3. By May, it was down to 13 – even though the price per share was some $100 higher.

    I strongly suspect we will see a repeat of this phenomenon next year, with a peak P/E ratio just before January earnings and a peak P/E compression sometime after April earnings. Accordingly, I think we need to start thinking of Apple’s P/E ratio in units of years rather than quarters in order to determine whether or not P/E compression is still actually occurring.

  • Aenean144

    I think the numbers on iPhone and iPads are too high. The rumors for an iPad 7.85″ and revised 2012 iPad with new dock connector would provide some headwinds for iPad units. I think iPhone 4S units really dropped a lot in July and August pending the iPhone 5.

    • http://policydiary.com/ John S. Wilson

      I don’t think so. Those rumors weren’t widespread enough or consistent enough to warrant heeding to.

  • Michael Leishman

    Horace, at what point will you readjust your expectations of growth for Apple?

    Put another way, at what point do you expect Apple’s quarterly growth to settle down to a “more reasonable” level of, say 10%, quarter over quarter?

    I don’t think you expect that the growth rates over the last 5 years are typical, or that we should expect 50 or 60% growth each quarter. Or am I wrong?

    That you call current levels “disappointing” is a little curious. I hope you are not falling into a Wall Street trap (in Canada we call it Bay Street) of expecting extraordinary growth as the new norm.

    One other thing. It would be nice to see a graph of the cumulative growth alongside of the graph above to give a more complete picture of growth. Taken on its own the graph above might lead one to think Apple was headed the way of RIM! :-) Graphs do contain a lot of good data but they also make very powerful impressions “at a glance”; a graph without enough context might be as misleading as a graph that is plain wrong.

    Love your work; hurts my head – in a good way. Cheers, Michael

    • Gordon Shephard

      “Put another way, at what point do you expect Apple’s quarterly growth to settle down to a “more reasonable” level of, say 10%, quarter over quarter?”

      The numbers cited by Horace are Year-over-Year, not quarter-over-quarter. 10% quarter over quarter yields approx 50% Year-over-Year growth.

      • Michael Leishman

        Thanks Gordon.

        Does that mean that Q112 was 20% higher than Q111, which was 92% higher than Q110, which was 86% higher than Q109, etc?

        If so, I think my points are still relevant and worth some investigation. Year over year growth “should” go down over time.

        I should get off my butt and submit a graph that shows growth in Q1 for each year based on a base number – probably from Q106, before the iPhone.

        Cheers, Michael

      • Alex

        Yes, that’s what those numbers mean. It’s pretty much always year-over-year, not quarter-over-quarter growth.

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  • Jony

    Who thinks apple will beat or miss?

    • AAPLADAY

      Beat

  • Horace the Grump

    Will iPhone 4S sales be in the ‘toilet’? Hard to know given that you could argue that Apple has maintained a 3 thier pricing structure for the iPhone for a while – entry level (now iPhone 4), mid level (iPhone 4S) and premium (iPhone 5).

    Apple doesn’t talk about how many 4’s it has sold in the past year or the 3GS but it has to be a non-trivial number (several millions I expect). That does rather complicate things in terms of picking a number.

  • Stefan Sidahmed

    Horace,

    If I apply Apple’s guidance for OpEx, OI&E and tax rate to your Rev of $39.5B and GM of 42%, I get EPS of $10.44 (assumed diluted shares stay flat due to the buy-back).

    Wondering where you and Apple differ on OpEx, OI&E and tax rate, because it must be significant.

    Thanks, Stefan

    • http://www.asymco.com Horace Dediu

      Thanks for pointing this out. I had neglected to update the tax rate (I had it at 30%). Placing it at the guidance level results in EPS of 10.43. None of the other figures differ from their guidance.

    • http://www.asymco.com Horace Dediu

      I’ve updated the post as follows: [Update. The EPS figure above includes a tax rate estimate of 30%. Company guidance was 25.5%. Using the company's guidance yields an EPS of 10.43. TTM EPS becomes $45.9/share and at $697 the PE is 15.2. At time of this update the share price has fallen to $665 and thus the pro-forma trailing P/E ratio is 14.5).]

  • http://twitter.com/MacsFuture Lex McFarley

    I think the iPhone sales will be north of 30 million for this quarter. Last year, the iPhone 5 came out after the 4th quarter. The 4th Quarter iPhone sales were just 17.7 million compared to 20.34 million for the 3rd Quarter of that year. So sales went down as people expected and waited for the iPhone 4s. The same thing will happen this year. The 3rd quarter of this year Apple sold 26 million phones (more than the year before has more networks, stores, countries etc.). So If we give the same hair cut as last year for the slow down ion sales we get something like 22 million sales for the 4th quarter. But hold on, the iPhone 5 went on sale and sales started counting for that phone on September 21, 2012, with 9 days left in the quarter. So obviously those sales were crazy. I would add in 10 million, so my guess is 31 million for the 4th quarter in iPhone sales.

  • Jony

    What is the street expecting? What do they have to surpass to beat ?

  • http://twitter.com/marcopapa marcopapa

    After today announcement that 100M iPad have been shipped to date, several people have calculated that the maximum number of iPads sold in this quarter is probably around 14.66M, below the street 17-18M, and well below the above figure of 18.8M.

  • Jony

    Hey, based on today’s keynote where Tim said they sold 100 million ipads…does your estimate for Q4 change? I’m figuring around 16 million….any thoughts?

    • http://www.asymco.com Horace Dediu

      I also think about 16 million, however, one has to be careful with the claim of “sold” vs. “shipped”. I believe Tim said sold which is either deliberate or an oversight.