Apple’s calendar year fourth quarter 2013 earnings are out. Here are some of the highlights:
- iPhone sales fell significantly below analyst expectations of 55 to 56 million units with just 51 million units, which amounts to just 7% year-over-year growth. Growth has fallen off significantly — it was 29% in the fourth quarter a year prior.
- iPad sales surpassed analyst expectations and reached a new quarterly record. Total units sold were around 26 million for year-over-year growth of 14%.
- Apple’s total revenue is up about 6% from the fourth quarter of 2012. The iPad and iPhone lines made up 76% of total revenue for the quarter, a peak in their revenue share that was last reached in 2012’s fourth quarter. iPad-iPhone revenue share had fallen during the first part of 2013.
- iPhone average selling price (ASP) ticked up to $US637 which is up 10% sequentially from the third quarter ASP of $US577. This spike implies a consumer preference for the high-end iPhone 5S rather than discounted older models or the cheaper iPhone 5C. Last year’s fourth quarter ASP was just marginally higher at $US642.
- iPad ASP held relatively steady at $US439 despite the introduction of the newer, more expensive iteration of the iPad Mini.
Here’s a look at the ASP trends:
In the third quarter, the decline in iPhone ASP was largely a function of how consumers reacted to the then-current iPhone product mix. Consumers likely embraced older models, the iPhone 4 and 4S, which were priced aggressively after the iPhone 5 launched at the end of 2012.
An opposite trend was in effect in the fourth quarter.
When it launched the two new iPhones, the 5c and 5S, Apple discontinued the 2012 flagship iPhone 5 rather than lowering its price point on the device, as it had done in years prior with its legacy flagship handsets.
Apple’s intention was to fill the void left by the discontinuation of the iPhone 5 in the mid-range price category with the new iPhone 5C.
But, based on the significant jump in iPhone ASP, it seems consumers were not impressed with the 5C’s value proposition compared to that of the iPhone 5S. As a result, it looks like Apple’s fourth quarter sales of the premium iPhone 5S must have severely outpaced those of the “lower-cost” iPhone 5C.
Apple CEO Tim Cook admitted on the earnings call that consumer demand for the iPhone 5S in North America surpassed Apple’s own expectations.
As far as the iPad goes, ASP remain unchanged sequentially and only dipped slightly compared to the same quarter the year prior. This, despite iPad unit sales growing 14% overall and despite the fact that Apple upped the base price of the new iPad Mini.
Here’s a look at iPhone unit sales and year-over-year growth:
Here is a look at iPad unit sales and year-over-year growth:
Here is a look at Apple’s total revenue broken down by product segment.
Notice that the iPhone and iPad combined for a larger share of revenue than in any of the previous quarters shown in the chart.
What’s more, iPad revenue skyrocketed past revenue for its desktop counterpart, the Mac, with a 20% share of revenue compared to Mac’s 11% share. In the previous quarter, iPad and Mac were dead even at 17% share.
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