Saturday, February 26, 2011

Apple: Nine Quarters of iPhone Unit Sales and Revenue Per Unit

Apple: Nine Quarters of iPhone Unit Sales and Revenue Per Unit
Apple is currently experiencing a period of startling revenue and earnings growth. This growth is due in large part to the virtually unbridled success of the popular Apple iPhone. The only practical limit on iPhone sales is the company's ability to manufacture sufficient product to meet global demand. 
In four of the most recent nine fiscal quarters year-over-year iPhone unit sales growth reached triple digits. In all but one quarter year-over-year unit sales rose greater than 60%. Over the most recent eight fiscal quarters revenue from sales of iPhone handsets and related accessories rose from $2.940 billion in the first fiscal quarter of FY 2009 to $10.468 billion in the first fiscal quarter of FY 2011. Over this same eight-quarter period unit sales have increased from 4.363 million units to $16.235 million units.
Revenue Per Unit
There are two ways to view revenue generated from iPhone unit sales. One way is by charting the iPhone average selling price. The other, and the method used in this post, is to chart revenue generated from handset sales and related accessories. The data used in this post is sourced from Apple's quarterly data sheets that incorporates revenue from iPhone accessories sales into the numbers. 
As the chart and table data below indicate, revenue per unit sold has remained fairly consistent over this nine-quarter period. The drop in revenue per unit sold in FQ3 2009 was due to the sharp drop in price on the iPhone 3G as the 3GS iPhone was released but in constrained supply. There is a slight seasonal benefit to revenue per unit in the holiday quarter (FQ1) each year. In FQ4 2009 year-over-year unit sell through increased 38% but reported unit sales rose only 6% due to a dramatic increase in channel supply of iPhone 3G units the prior-year period. In FQ3 2010 Apple put the brakes on iPhone 3GS production ahead of the release of the iPhone 4 leading to a 61.25% rise in unit sales year-over-year but a sequential drop in unit sales. Prior to Apple's action to reduce channel supply of the 3GS handsets at the end of the quarter, unit shipments had been running at about a 90% year-over-year growth pace. 







Revenue 
Sequential
YOY

Quarter
Units
Revenue
Per Unit
iPhone Units
iPhone Units

FQ1 ’09
4,363,000
2,940,000,000
674
-36.69%
88.47%

FQ2 ’09
3,793,000
2,427,000,000
640
-13.06%
122.72%

FQ3 ’09
5,208,000
3,060,000,000
588
37.31%
626.36%

FQ4 ’09
7,367,000
4,606,000,000
625
41.46%
6.89%

FQ1 ’10
8,737,000
5,578,000,000
638
18.60%
100.25%

FQ2 '10
8,752,000
5,445,000,000
622
0.17%
130.74%

FQ3 ’10
8,398,000
5,334,000,000
635
-4.04%
61.25%

FQ4 ’10
14,102,000
8,822,000,000
626
67.92%
91.42%

FQ1 ’11
16,235,000
10,468,000,000
645
15.13%
85.82%

No matter the expanding global presence and the continuing rise in unit sales, revenue per unit sold has remained fairly consistent. There's apparently no deterioration in revenue per unit sold in markets in which multiple iPhone carriers compete for business or in markets in which the iPhone has been newly introduced. Apple's ability to maintain high revenue per unit sold is remarkable. The recent release of the iPhone on the Verizon network and introduction of domestic competition for iPhone handset sales between AT&T and Verizon will most likely not have a material impact on revenue per handset sold. 
iPhone Revenue and Unit Sales
The Apple iPhone represented about 39% of Apple's reported revenue in FY 2010 and represented a similar 39% of reported revenue in the first quarter of FY 2011 despite the rising revenue contribution from the Apple iPad. In the December quarter the Apple iPhone and iPad represented just over 56% of Apple's reported revenue. In FY2010 iPhone unit sales rose about 90% over the prior year. In FY 2011 iPhone unit sales should at least match that performance due in part to the release of the iPhone on the Verizon network and the anticipated release of the CDMA iPhone through China's largest cellular services provider. 

Robert Paul Leitao

2 comments:

  1. Excellent information Robert. Thanks for another great post. I think it is very important that the RPU trend is understood by investors. Wall Street seems to constantly been suggesting that iPhone prices are in for a great fall, and to this
    point in time they have always been wrong. Understanding that helps one see why the analysts consistently have long term price targets that are too low.

    An idea that might make your table even more valuable, a 'notes' column on the right. Example - "includes initial 3 days of iPhone 4 sales"' "added 20 more countries"' "channel bleed of iPhone 3GS dropped x unit from channel inventory". That information makes the numbers so much more meaningful.

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