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Apple's Calendar Fourth Quarter 2012 Growth Scorecard

The fourth quarter of 2012 was 13 weeks in duration while the fourth quarter of 2011 was 14 weeks. The difference implies that a comparison of revenues should be done with an adjusted 93% of the 2011 values. The growth for 4Q 2011 relative to 4Q 2010 should also be adjusted on this basis.

The following tables show the unadjusted and adjusted growth rates. The adjustments apply to the bottom table and the columns highlighted.

Screen Shot 2013-02-04 at 2-4-7.19.18 PM

As in previous scorecards, I used the following color scheme to “grade” the performance.

Screen Shot 2013-02-04 at 2-4-12.14.53 PM

The adjustment brings growth in sales to a respectable 27%, well above the 18% unadjusted level. In fact, using the color map grading system four lines increase their rating from “Moderate” to “High” growth: iPhone, iPad, iTunes, Accessories all move from the 20′s to 30′s  percent growth.

The bottom line moves from 0% to 8% growth but it’s still low relative to historic performance. That had to do with margins; more about that later.

The graphs showing Revenue and Earnings growth with and without adjustments are shown below:

Screen Shot 2013-02-04 at 2-4-7.21.34 PM

Note that iPad, iPhone, Accessories and iTunes/Software are based on re-stated figures.

Note also that the adjusted 2011 growth rates do not change dramatically with only iPad changing from Exceptional to Very High.

  • http://twitter.com/ianwaring Ian Waring

    Everyone knows that Apple had severe supply constraints across the board on Macs in Q4, so it’s boned headed to try to draw any useful trend analysis. Just a click bait headline. Once the screen supply issues are sorted, then the graphs will buckle the other way. The only surprising thing is how ineffective Windows 8 devices were at taking up any market slack throughout Q4.

    • Anthony

      Macs or iMacs? Laptops are the majority and didn’t have supply issues. The disappointing thing is that cook said that the laptops kept up not out grew the market.

      • JDL

        iMacs have a much higher ASP and Mac Pros even more so. Also why would you buy one instead of waiting when Apple have basicaly said “if you can wait to upgrade then wait for the new 2013 Mac Pros”. Hell, in the UK it is still 3-6 weeks to get an iMac and for a long time you simply couldn’t buy one online, no waiting period, Apple just wouldn’t sell you one.

        The Macbook Pro + RD you could not get in November, you could pay for it but you wern’t gona get it till December, iPhone 5 was only slightly better, that was only in stock by mid December. This sales drop, if the UK is a guide has been due to supply not demand and if you read what Cook said, not what was reported he makes it very clear several times that it is a component supply problem.

        We will see strong sales this quarter but Q2 (Apple q3) is when we should see a real spike, ignoring new product lunches, just on the stuff they are selling now, on a YoY basis.

    • FalKirk

      “Just a click bait headline.” – Ian Waring

      I’m guessing that you’re not from around here, and with that attitude, you shouldn’t return.

      Listen, Ian, no one is doing click bait headlines at this site. I know it’s shocking to consider, but people come here for intelligent discussion and debate, not trolling and name calling. Take a deep breath, adjust your attitude and take another look at the body of work posted here – including the comments. I think you’ll be pleasantly surprised to learn that this is a place of learning and sharing.

      • jameskatt

        Other sites are doing the link baiting.

      • http://alexandersmith.co/ Benjamin Alexander

        Thank you.

    • Walt French

      Along the lines of FalKirk’s observation: simple trend extrapolation is not practiced here, so a “growth scorecard” is kinda the opposite of a bonehead attempting it.

      Your point that Apple’s supply issues weren’t met by a Windows opportunity is equally as interesting as that other point was insulting, though. Apple took the chance on a product upgrade right when they were going head-to-head with Surface; they couldn’t crank ‘em out fast enough, and Microsoft still couldn’t move a million of ‘em to final users (according to various SWAGs I’ve seen).

  • EnGeeYes

    Horace,

    Adjusted Q4 2012 sales growth number appears to be wrong. Math does not add up. I think 1.18*14/13 is 27% growth not 41%

    • BGC

      Shouldn’t the base be: Q42011/14*13 – then it fits.

      • Sebi

        Logically there is something wrong, all the revenue growth percentages in Q4 2012 are lower than 41%.

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

        Sorry about this. I had the formula applied to the wrong row.

        The correct value is 27% growth on Net Sales.

        I will fix.

      • Anonymous

        Also, if one quarter (4th) is modified/adjusted, then also some other other quarter on a year-to-year basis should also be modified for similar reasons. The extra week appearing in one quarter will appear in some other quarter the following year to get the total year’s weeks to sum to the same number.

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

        If you are comparing sales over a period of time then the comparison is most meaningful when the duration of time is constant. So if you are comparing sales per quarter it makes sense to keep “a quarter” as a constant value. If you are comparing sales per year it makes sense to keep “a year” as a constant value. So to account for the missing week, there should be a comparison of 2012 with 2011.

    • mieswall

      All in all, this is not much of a difference. The long term trend seems to be the sales growth, that should be normalized by the “new-iphone effect” (sales artificially deppresed the previous Q, artificially enhanced the release Q). The earnings figures are very misleading due to the abnormal profit obtained by two very high margin Q’s. Unfortunately, the whole market (and myself) got obnubilated by these Q’s, projecting figures as a growth in profits (instead of sales) with that base. Thus, most analyst were forecasting half a year ago an EPS over 60 for FY13. This would be in line with a “normal” TTM P/E of 15, 16 if the earnings of Q1, Q2, if were sustainable, which were not, of course.

      Now the stock is priced as a non-growth rate, which is another exaggeration, because of the aforementioned GM effect. What Apple has to do, IMO, is to assure a sustained sales growth around the 39, 23, 27% of Q312, Q212, Q312. Perhaps a little higher because of product releases, but certainly with lower margins,m due to market maturity. All in all, some 15-20% sustained growth.

      To do that, Apple should be using the mountain of cash investing in production, diversifying and getting rid of non-trustable suppliers, and building the next big business areas (media, iwallet, advertising). But Cook is not doing that. My bet is that he has not the guts, neither the visionary spirit required.

      • tmay

        Myself, I’m not too concerned with what Tim Cook is doing or not doing with media, iWallet or advertising. I’m not sure what Apple’s direction will be with advertising, and Apple needs to respect it’s customer base, but for media and iWallet, I suspect that Eddie Cue is quietly working behind the scenes.

        I’m not especially concerned about Apple’s turn to exotic manufacturing technologies such as friction stir welding, or its obsession with minimizing the physical size of its various product lines, or ultimately scales up, or cost reduces some of same products to meet the needs of various markets.

        I am concerned with how Apple enters the living room as more than a hobby, and this is where I believe that all of those manufacturing technologies that Apple has struggled to master come into their own.

        So what are my expectations for the living room.

        My first assumption is that there will be 4K IGZO televisions at launch, and that Apple will provide h.265 encoding for the itunes driven media. That also means that Apple will have a new A series SOC that will support h.265 and 4K. I would expect similar manufacturing technology to the iMac, so that the television will have a premium build. Apps will finally be supported, including Siri and games.

        Connectivity will be primarily Thunderbolt and WiFi, with Blue Tooth, and USB 3.0.

        My prediction is that Tim would like to launch this in the fall, but I really expect to see it, if it indeed ever arrives, in 2014.

        Regarding Tim Cook’s lack of vision, I don’t believe that it is even relevant to 2013′s product pipeline.

  • Johan Meylaerts

    Horace. What do you suggest that should happen with the huge revenue of the deducted 14 th week? Is it left out of further comparisons or does it shift to Q3 ’11 or to Q1 ’12. Shouldn’t it be taken into account somewhere and if so, how will it impact growth of other quarters?

    • Walt French

      If you start with trying to make an excuse, you’ll get an excuse. If you start by trying to understand, … well, you have a better chance.

      First, a bit of fact: Apple’s 1FQ13 started Sunday, October 30th 2012 ended on Saturday, December 29th. That compares to Sunday, September 25th 2011, thru Saturday, December 31st 2011.

      The difference is the two last days of the year, which I’d think would be pretty good shopping days — what with gift certificates and/or cash presents, and 5 days around the end of September, which I will guess — retail experts can correct me — are probably sub-average days.

      Net-net, I don’t think 13/14 quite captures it—obviously true but maybe not quite as meaningful as if taken at face value. As far as supply is concerned, I’d put a LOT more stock in Apple’s explanations of start-up glitches on the iMac line, reports of yield issues on various screens and the widely-reported comments from Foxconn, that the iPhone5 was “the most difficult device” it’d ever assembled.

      I’m pretty sure that everybody still assumes that Apple’s the king of supply chain management—these various hiccups will go away and Apple will widen the quality gap on its competitors—and so the concern is around demand.

      • Johan Meylaerts

        Thanks for the reply (will not comment on first paragraph though). When you wrote ‘Apple’s 1FQ13 started Sunday, October 30th 2012′, I suppose you meant September 30th 2012.

      • Walt French

        Regrets about that first sentence, it wasn’t really aimed at the comment I replied to. And re Sept/Oct: yes, dunno why I clobbered that. Fixing it now.

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

      Not sure why something must happen to it. The measurements of growth are meant to give an idea of relative performance. You could say it’s the performance over a particular 13 week period. We can measure full year growth separately to get another growth measure.

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