AMITIAE - Tuesday 21 July 2015
Cassandra: Last-minute Examination of Apple's Upcoming Q3 2015 Financial Report
By Graham K. Rogers
Commentators rarely listen to what they are told, particularly when it comes to Apple. Tim Cook has said that the figures for this device will be bundled in with other items, deliberately to avoid panic comments. Not that this has stopped the usual pundits, whose estimates of the numbers sold range from around just under 3 million up to 6 million. As he often does with speculative figures, Philip Elmer-DeWitt on Fortune, has collected the numbers and averaged the estimates from the 27 analysts in the list to give an estimate of 4.07 million Apple Watches sold. Bear in mind that of the 27, on whose predictions people may hazard their life savings, most are wrong.
Some guiding facts have been available to those who pay attention and do not seek to grab headlines (for good or bad). Apple's own, traditionally-conservative guidance as outlined in the Q2 2015 report, suggested that revenue is expected to be between $46 billion and $48 billion with operating expenses between $5.65 billion and $5.75 billion.
Earlier this month, International Data Corporation (IDC) reported that in a declining PC market, sales of Apple Macintosh computers had seen a growth of 16.1% worldwide. A few days later, it was reported that despite only having a 20% market share, iPhone sales were taking 92% of the profits in the smartphone sector, with Samsung now a distant second with 15%. The mathematical discrepancy is because most handset makers in this group make a loss.
As a result of these good signs, some analysts are aiming their predictions (Roger Fingas, AppleInsider) slightly higher than Apple's guidance at $50 billion. Not all are convinced, however, with Alistair Charlton on International Business Times suggesting the figures will be hit by "lacklustre Apple Watch sales" something about which he can know nothing, but again rolls out the largely-discredited figures from Slice Intelligence that only took data from online sales in the USA. This selection of analysts quoted estimate revenues of over $50 billion, with a highest guess of $52.5 billion.
Business Insider's Jay Yarrow calls this Apple's Fiscal Q2 when everyone else, including Apple, refers to this period as Q3. However, some predictive maths tells us that last quarter, the "Other" category brought in some $1.7 billion so it may be possible to estimate Apple Watch sales from that. This is a slightly muddy method as even within the Watch category, Apple is not breaking down the different models or straps (some will buy more than one), so using an average figure of $500 is likely to be inaccurate: close, perhaps, to the nearest quarter million sold.
Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand where he is also Assistant Dean. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs. He is now continuing that in the Bangkok Post supplement, Life.
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