Malcolm Owen
Apple could see a growth in holiday quarter sales, a report claims, but with claims that the change is less about the new iPhone launches and more about the supply chain and a slow holiday quarter in 2022.
Apple's financials haven't gone as well as they could've in 2023, with three successive quarters of year-on-year revenue decline. However, Q4 2023 could break the trend, with high holiday sales expected to occur.
In Sunday's "Power On" newsletter for Bloomberg, Mark Gurman puts forward the notion that Apple is "poised for growth this holiday season," and could see its first sales increase in four quarters.
Gurman reasons that the financial improvement will be "less because of a can't-miss product lineup," but more because Apple's supply chain has improved. It's also going to more favorably compare against the year-ago holiday shopping period, which was deemed "slow."
So long as Apple's supply chain doesn't get disrupted or encounter difficulties in China, it has "an easy path to clearing the $117.2 billion in rang up last holiday season," writes Gurman. With Wall Street expectations of around $123.5 billion in revenue, that would represent 5% growth.
Gurman adds that it could've been higher, as 2023 was a light year for releases, skipping the March product cycle for June launches of M2 Macs. And even then, items such as the Mac Pro's existence are deemed "a confusing upgrade" to consumers.
Similar complaints are laid against the Apple Vision Pro, that won't launch until 2024 and will have "little impact on Apple's financials for many years," the performance boost of the 2023 Apple Watch range that doesn't do enough to be "majorly visible," and the relative lack of changes to the AirPods Pro.
"While the product lineup for 2023 will probably let Apple meet financial targets this holiday period, it really just serves as a stopgap for 2024," Gurman summarizes.
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2 Comments
FYQ1 2023 was not “slow”, it was on target to do well, but the China lockdown supply disruption brought iPhone sales revenues down -8% and gross revenue down -5% YOY from record highs in Q1 2022. That decline has followed Apple’s quarters throughout the year, yet Apple has been chipping away at it. So much so that by end of Q3, the YTD decline is only iPhones -4% and gross revenue only -3% in one of the most turbulent and inflationary macroeconomic environments any company has faced.
if Apple has a solid Q4 with the iPhone 15 introduction, FY2023 revenues has the potential to be only down -1.5-2% to even flat which would be quite an accomplishment IMO.
if Q1 shows a strong demand plus favorable mix towards the iPhone 15 Pro and Pro Max models, that would show Apple’s user upgrade demographics remain strong and resilient, plus Apple keeps attracting Android switchers and new users worldwide. The revenue recovery will take time but I think Apple is poised to have at least their 2nd most productive and profitable Q1 on record if not set a new All time revenue record beyond previous $123.95.
iPhone is a good start. I don’t know if it will be a super cycle, but it’s a fantastic offering. I think the M3 lineup will entice the last of the Intel holdouts as well as plenty of m1 upgrades to make the buy. Especially if the big iMac makes a return in a special way (ultrawide, new design, packing a 3nm ultra chip, etc). And a m3 MacBook Air and Mac mini with base chips that outperform higher tier m2 chips for a fantastic 2024. Add the vision pro into the mix for a nice Apple TV-like bonus to the mix.