By Alex Brooks On Monday Apple will report its Q4 2014 fiscal results, the quarter that ended on September 30 marks an important one as it takes in the majority of Apple’s back to school season. Notably the quarter only includes about a week and half of iPhone 6 sales, it’s unknown how much detail Apple will go into about the success of the launch so far—at last week’s media event the company failed to give any numbers.
Let’s explore some elements of Apple’s results release; namely the ever slumping iPad sales number, the end of year total, and the analyst estimates.
iFad?
Whilst this is set to be a good quarter as quarters go there are questions on every onlookers mind. The iPad has been in decline for several quarters now, Tim Cook described this as just a ‘speed bump’. This comment followed Apple announcing sales of 13.3 million iPads for the June quarter, down from 14.6 million in the year before quarter.
So is Cook right and this is just a hiccup or is the iPad model more of a fad than an iPhone like trajectory? Last week Apple released another set of updates to the iPad lineup and in a rather un-Apple like way expanded the iPad lineup to include not two, not even three, but five models of iPad. This lineup naturally creates a large price umbrella, is this what Apple thinks is required to start boosting the sales numbers?
Apple’s End of 2014 iPad Lineup
Others have spent time exploring whether it’s the tablet market itself that is at fault. Or if it’s even safe to say that with under four years of iPad sales data whether patterns can yet be predicted, you might ask what is the average upgrade cycle of an iPad owner?
Jean-Louise Gassée a long time Apple pundit wrote back in April of this year about the iPad being a tease, in effect arguing that the iPad is amazing for some tasks but when it comes down to it the Mac (or PC) lives on.
I’m not entirely sure this argument is the full picture but it does have some merit. Tablet sales have been steadily outpacing the ever declining personal computer market for some time now, even to the point where Apple touted that it now sells more iPads than any other PC manufacturer sells Windows PCs—not exactly a watertight point but an indication of direction.
It does however appear that by all estimates iPad sales fell during the September quarter of 2014. Estimates are coming in at around 13.1 million units sold (compared to 14m a year ago), if this turns out true then Apple will have some more defending to do, particularly if the low number knocks into their revenue number.
Another Record Year?
The end of the September quarter also marks an important milestone with the end of Apple’s financial year. During fiscal year 2013 Apple totalled up $170.91 billion in revenue, a sizeable record even by Apple’s standards. So far in 2014 Apple has reported around $140.5 billion, and with Apple’s lowest revenue estimate sitting at $37bn it looks like it’ll smash its own fiscal year record. That should be something to settle nerves ahead of the always jaw dropping December quarter.
Apple’s quarterly revenue (Q110-Q314)
The Estimates
Estimates for Apple Q414 are as follows (Apple’s estimate range in brackets):
Revenue – analyst average $39.85bn ($37-40bn)
Gross Margin – 38.5% (37-38%)
EPS – analyst average $1.31 ($1.12-1.32)
Apple doesn’t predict future unit sales, so these figures all analyst estimate averages (year ago quarter figure in brackets).
iPhones – 37.8 million (33.7m)iPads – 13.1 million (14m)Macs – 4.85 million (4.57m)
Apple will release the results of its fourth fiscal quarter at 4.30PM EST (9.30PM London), this will be followed by a live conference call half an hour later.
Source: World of Apple
