Parks Associates Blog

Wednesday, January 21, 2009

Apple 4Q08 Sales Highlights

Apple released its calendar year 4Q08 earnings this afternoon. Here is a quick recap of the numbers and growth I care most about:

iPod: 22.7 million units for the quarter, slightly higher than my projected 21.9 million units. This gives Apple total sales of 55.3 million units in 2008, up 5% year over year. Average selling price dropped slightly from $150 to $149, indicating that holiday sales did not help Apple sell more high-end models. As a result, iPod revenues in 2008 dropped 4% year over year. Apple said in the earning release that iPod growth came mainly from the international market.

iPhone: 4.36 million units shipped during the quarter, down from 6.9 million in 3Q08. This was lower than my estimate of 5 million units, and it looks like the recession did have some impact on iPhone demand. But more than 11 million iPhone sales in two quarters is still a great achievement

Apple TV: The Company reported 300% yoy volume growth in 4th quarter, but volume was still low overall. Tim Cook, the acting CEO of Apple, referred to Apple TV as “still a hobby.”

Other Music Related Products and Services: This is where the iTunes sales are reported. Revenue topped $1 billion for the first time, up from $832 million in 3Q08 and a net increase of almost $200 million over 4Q07. A large portion of the contribution should come from Apple App store sales, if we assume modest increase in year-over-year iTunes music and video sales. Of course, rental revenues also helped.

It looks like not a bad quarter for Apple, except for the weaker unit sales of iPhones. Since this is only the second quarter of iPhone 3G on the market, its seasonality and demand strength is a bit difficult to model. Given the disappointing mobile handset shipment numbers from Motorola, Palm and Sony Ericsson reported last week, the first half 2009 could be tough even for the smartphone market.

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