Apple Q4 Results - Part 2

27 Oct 2015

Apple iPhone Quarterly Sales through Q1 2015 Projected

Apple reported record 2015 Q4 results that beat analyst expectations, and offered guidance at the high end of next quarter’s estimates:

2015 Q4 iPhone Unit Sales: 48 million
2015 Q4 Revenue: $51.5B vs. $51.1B expected
2015 Q4 Net Profit: $11.1B vs. $10.6B expected
2016 Q1 Revenue Guidance: between $75.5B and $77.5B

So why am I focusing on iPhone unit sales here and in the previous post? There are a couple of reasons.

First, Tim Cook stated on today’s call that a key objective is adding more customers. The driver of Apple’s growth in recent years is due to one product – iPhone. As the iPhone goes, so goes Apple, at least in the short and medium term. How many phones they sell is a good way to track that. Note that average selling price has been trending up slightly.

Second, iPhone sales as a percentage of total revenue have increased steadily over the past three years:

2013: 53.1%
2014: 56.0%
2015: 65.9%

By the way, the highest percentage of iPhone sales to revenue was the first two quarters of the 2015 fiscal year, 68.6% and 69.4%, respectively.

To forecast a wide range of unit sales for 2016 Q1, we could take the lowest percentage of iPhone quarterly sales in 2015 to total revenue (62.5% in Q4, the most recent quarter) and the low end of next quarter’s guidance ($75.5B), and then take the highest percentage of iPhone quarterly sales in 2015 to revenue (69.4% in Q2) and the upper end of guidance ($77.5B) – and use the Q4 average selling price reported today ($670/unit) – and come up with very rough range:

2016 Q1 iPhone unit sales forecast: Between 70.4 million and 80.3 million

Yes, that’s a wide range. The consensus is that iPhone unit sales crack the 74.5 million mark from last year’s holiday quarter, which is right in the middle of this 70 to 80 million range. I think the thing to watch for, though, is iPhone unit sales topping the 79 million mark next quarter. That’s pretty small year-over-year iPhone unit sales growth, about a 6% increase. “We think we can grow iPhone (sales) during the December quarter,” Chief Financial Officer Luca Maestri told The Associated Press. So… let’s put that out there.

If the consensus ~75 million iPhone unit sales figure does end up being correct, and if Apple does come in at the high end of its total revenue guidance, it will probably be due to an increase in Apple Watch sales.

Categories Apple