It’s that point again: On Wednesday, Apple will regale us with stories of the merchandise it has sold up to now quarter, and the money it has added to its overflowing bank account. Financial analysts will pepper CEO Tim Cook and CFO Peter Oppenheimer with questions, which-if previous calls are any indication-the duo will deftly dodge.
As usual, Macworld will be on hand with live coverage of the conference call, beginning at 2 p.m. Pacific/5 p.m. Eastern. We’ll provide you with the ever scintillating byplay between Oppenheimer and Cook on one side and the hordes of financial analysts on the other, and bring you the very best in
analysis.
Still, that doesn’t mean you should jump right into the deep end of the pool: You need to limber up first with a few mental deep-knee bends. So we’ve prepared a handy primer of the topics that will likely surface during the hourlong conference call, to get you prepared so that you, too, can play along at home.
iPhone 5 sales of the century
No surprise here. After the ungodly uproar over Wall Road Journal and Nikkei stories about “weak” iPhone 5 demand, the market’s going to be on the lookout for any excuse to badger Apple about gross sales of its newest smartphone. There’s undoubtedly a notion on Wall Street that Apple lives or dies by iPhone sales lately, even if the truth is extra complicated.
So what do we know? Well, Apple has already informed us that it sold 5 million of the handsets through the system’s launch weekend, and dealt out one other 2 million when the iPhone 5 went on sale in China a number of months later. The analysts will little doubt have already run the numbers on last quarter’s nearly 27 million iPhone sales, to strive to figure out what share of those might be laid at the ft of the iPhone 5.
Apple doesn’t habitually break out gross sales of its individual product strains, although, so expect a considerable amount of scrutiny on the full iPhone sales for the quarter. For comparison’s sake, the corporate sold 37.04 million iPhones in last yr’s first quarter; expect analysts to scream their heads off if Apple doesn’t high that number.
And you can count on plenty of questions on Apple’s provide/demand steadiness for iPhones, and what the company expects to promote within the following quarter. (Hint: Apple by no means forecasts specific numbers on its product traces, so don’t anticipate any “additional coloration” on that.)
Finally, what would Apple’s quarterly conference name be with out analysts’ attempts to squeeze particulars from Prepare dinner and Oppenheimer about future merchandise? The rumored low-price iPhone is the almost certainly goal here-anticipate inquiries about “Apple going after the low-finish of its market.” And expect Tim Cook dinner to utterly stonewall them-he’s the form of guy who can win a staring contest over the telephone.
Mini iPad, maxi profits?
Apple’s different new iOS system will probably be eclipsed by the iPhone sales questions, however don’t assume it's going to solely escape attention. This is the primary full quarter of the iPad mini’s availability, and though we know that the Wi-Fi-only models of it and the fourth-era iPad picked up three million sales in their first three days, and contributed to the 14 million iPad gross sales from last quarter, there are nonetheless more likely to be some questions over the sales efficiency of Apple’s tablets.
In particular, it seems possible that analysts will wish to get an thought of whether the decrease-worth iPad mini is taking away gross sales from its fourth-generation massive sibling. After all, Apple’s hardly an organization to sacrifice revenue margin with the intention to produce a low-cost product, so there’s little query that it’s still making bank on the mini-the query is whether or not it’s at the expense of iPad profits.
We might additionally see some questions from analysts about how usually to count on refreshes of Apple’s tablet going forward. Final fall’s fourth-technology iPad got here only about half a year after the third-generation mannequin; analysts will want to attempt to suss out whether or not that was an aberration or the brand new world order.
Within the year-in the past quarter, Apple moved a then-file 15.four million iPads. Having already passed that quantity in final year’s third quarter, Apple will likely top it for this previous holiday quarter as nicely, particularly with the low-value mini within the mix.
Mac the knife
The Mac line bought a bit of love final 12 months, with a massive revamp to the iMac line and improvements to the Mac mini. Whereas the analysts don’t seem to salivate over Apple’s computers as much as they do over its cell devices, you may still anticipate Apple to tout the sales of its desktops and laptops, especially in comparison to the growth (or lack thereof) in the remainder of the PC market.
If there’s the rest to be wrung from the Mac lineup, it could be a touch concerning the promised “something really nice” for pro customers that Tim Prepare dinner spoke of last June. Then again, Apple doesn’t typically use its monetary calls to talk about its roadmap, and it’s probably not a product with widespread consumer appeal.
And, simply to put numbers in context, Apple moved a not-too-shabby 4.9 million Macs final quarter, which in contrast pretty favorably with the 5.2 million it bought in the first quarter of 2012. Bolstered by the refreshes of the desktop line and the new Retina MacBook Professionals, expect sturdy sales from the vacation quarter. And, as ever, you possibly can probably wager that Oppenheimer will point out that fifty p.c of shoppers who bought Macs from the Apple Retailer had been new to the Mac.
Money in the bank
Apple ended its fiscal year 2012 with $121.3 billion in the bank, which would probably allow it to buy more than a few private islands around the world. Cook & Co.’s investment strategy seems to suggest that the company’s reserves will only continue to increase this quarter.
As far as raw numbers go, Oppenheimer last quarter forecast that the company would bring in $52 billion in revenue with earnings per share of $11.75. As of this writing, analysts’ consensus has those numbers pegged at $54.69 billion and $13.42 respectively. Apple’s guidance is famously conservative—the company estimates numbers that it’s confident of hitting—but Wall Street will also work itself into a tizzy if the company doesn’t meet the magical numbers that analysts have predicted.
Keep in mind that last year the company brought in $46.33 billion in revenue with earnings of $13.87 in its first fiscal quarter—that’s higher earnings, but lower revenue than what it’s anticipating this time. Looking forward in October, Oppenheimer attributed the drop in the earnings forecast to a number of factors, from the arcane—currency fluctuations—to the simple: The first quarter of 2012 had one more week than the first quarter of 2013.