Horace Dediu takes a bank shot at Apple’s holiday quarter

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How does he figure Apple’s December sales will be 36% higher than last year? It’s complicated.


It comes down to the effects of a burst of CapEx spending showing up in the revenue stream three months later.

From Preview of the holiday quarter on Asymco.com

Assuming that the spending on manufacturing equipment and information systems hardware (i.e. data centers) is in support of the iOS device sales and services we can try to show how sales correspond to spending with the following graph:

dediu bank shot

Click to enlarge.

Imagine the next gray bar reaching the green line. Skipping ahead to Dediu’s punchline:

iOS and Services sales to date have been $103.2 billion with an estimate for next quarter of about 54.3 billion (based on guidance) and thus a total through Q3 of $157.5 billion. Subtracting this from the $270.45 billion expectation from the calculation above gives a fourth calendar quarter iOS revenue of $113 billion.

Adding $7 billion for the Mac results in a total net sales of $120 billion. This therefore is what I’d put forward as a reasonable target for CQ4.

Note that this is equivalent to a growth of 36% from the 2017 fourth [calendar] quarter.

My take: That would get Wall Street’s attention. Last year’s December quarter sales were $88.3 billon, up 13% year over year..