What Apple’s incredible quarter means for Australia


analysis $46 billion in revenue. 64 percent quarter on quarter growth. 37 million iPhones shipped. Apple just stunned the world with some incredible financial growth over the last three months of 2011. But what do these results mean for Australia?

Normally, it’d be fairly hard to tell. But thankfully, the company filed its latest set of local financial results this week. With these in hand, plus Apple’s latest set of global financial results filed today, we can do some extrapolation to look at what the numbers for this little company we call Apple might look like in Australia over the next year or so. This is going to get a little complicated, so stay with me. Or, you think it’s too long and can’t be bothered reading all this, skip to the end; I’ll summarise ;)

Firstly, some background. What Apple has just filed in the US today is its financial results for the quarter (three months) to 31 December 2011. Globally in that quarter, Apple made $46 billion in revenue, a figure up 73 percent on the previous year, and 64 percent on the previous quarter.

Now Apple doesn’t break out Australian revenue in its global results — all we get is a headline ‘Asia-Pacific’ figure, which probably doesn’t represent Australian growth well, because it also likely includes countries such as Malaysia, Thailand and so on, which aren’t quite as affluent as Australia and probably don’t buy as many Apple products.

However, if I was to compare Australian growth to one of Apple’s operating divisions, I would say that we’re probably quite similar to Apple’s European division, which experienced revenue growth of 55 percent in the last quarter of last year.

Like most European countries, Australia has a mature and competitive mobile market, with multiple competing carriers and rapidly improving data speeds. Most European countries are easily classified as first-world nations and have affluent populations (their ongoing financial crises notwithstanding). In addition, Apple’s major product release in the last quarter of 2012, the iPhone 4S, no doubt drove much of the company’s incredible revenue growth. And importantly, the iPhone 4S launched simultaneously in October in the US, Australia and major European countries such as the UK, France and Germany, giving us a solid basis for comparison. Europe has also strongly adopted the iPad, like Australia.

Conversely, comparing Apple Australia’s results to Apple’s Americas segment (which achieved 92 percent growth, year on year, in the last quarter of 2011) may not give an accurate comparison, as it is likely that division of the country includes more countries (in South America) not classified as first world. I’m not sure what growth in those countries would like like.

Not that I’m implying this analysis is in any way ‘accurate’, by the way — it’s basically just slightly informed speculation ;) But it’s interesting to play with the numbers.

If we compare Apple’s results over the whole 2011 financial year (which ended at the end of September) for its various divisions, it also leads to a conclusion that Australia could be better compared with Europe than with Apple’s Americas division. In that financial year, Apple Europe grew revenues 48.6 percent, while Apple Americas grew 56.4 percent. In that same year, we know from Apple’s Australian financial results released this week, the company’s local division grew local revenues by a smaller amount, 35.9 percent. So still a fair way behind Europe — but more comparable to Apple’s Europe division than its Americas division.

Now we can start to extrapolate the future.

In the last quarter of the 2011 calendar year (which, remember, is the first quarter of Apple’s financial year), the results released today tell us that Apple Europe grew a little stronger than it had been — 55 percent, as compared with the 48.6 percent aggregate of the previous year.

However, perhaps the quarter which we should be comparing Apple’s Q1 2012 financial results with shouldn’t be the one twelve months previously, but Q4 2010, the quarter which would reflect Apple’s release of the iPhone 4? Again, for the European division we come up with a figure of about 56 percent growth. See where we’re going here? It’s starting to look like in general, Apple is growing its revenues at a consistent rate of something like 50 percent-ish a year in Europe at the moment.

In Australia, Apple’s growth has been a bit more subdued (as I mentioned, 35.9 percent in the 2011 financial year), although we went through a substantial growth spurt higher than 50 percent in the period through 2008 and 2010. So extrapolating from the European experience, what we might expect to see from Apple’s first 2012 quarter in Australia is something a little higher than 35.9 percent, because of the launch of the iPhone 4S locally in that period.

Could Apple Australia see growth rates of somewhere around 40 or 50 percent in the last quarter of calendar 2011, compared with the same quarter 12 months earlier? I’d say a figure somewhere around that would be likely. And the likely release of the iPad 3 this year, plus refreshed Apple Mac hardware and the constantly growing music, apps and eBooks iTunes ecosystem is likely to help keep that growth on track. Apple’s penchant for opening new retail stores in Australia won’t hurt.

What all of this means is something remarkable.

If Apple can achieve a revenue growth rate of between 40 and 50 percent in Australia over its 2012 financial year ending in September, that will mean the company will be pulling in revenues of between $6.8 billion and $7.32 billion from Australia in that year. When you consider that the company made $4.88 billion from Australia in the 12 months to the end of September 2011, that’s remarkable. It’s even more remarkable when you consider that in 2006, Apple’s Australian revenues were roughly a tenth of that — just $717 million a year.

Revenues around $7 billion will mean Apple Australia is closing in on Optus (which last reported operating revenue of $9.28 billion) in terms of sheer financial scale in Australia. The company’s revenues will start to approach 30 percent of those of Telstra, one of the largest companies in Australia of any kind. To put this further into context: Woolworths made $54 billion in revenues in its last financial year. If Apple’s growth trajectory continues for the next three or four years, it will be making something close a quarter of that total in very short order.

Now, I want readers to take all of this with an absolutely huge grain of salt. I’m extrapolating wildly here in almost every direction, and we really do not know enough about Apple to make any solid predictions about what kind of money it will be making from Australia over the next few years.

However, if we have learnt one thing about Apple in the past few years, it is that it has been able to make a metric ass-load more money than anyone expected it to. And if it continues to perform that way in Australia, it will quite shortly become one of this nation’s largest money spinners of any stripe.

TL;DR: Apple could be making almost as much money as Optus from Australia over the next two years.


  1. My guess is lot of extra product comes from growth in market share, which isn’t sustainable.

    • Really? Growth in market share isn’t sustainable?

      -In mobiles, Apple is still cannibalising Nokia and RIM, as are the Android manufacturers. There are still many, many non-smartphones out there.
      -In tablets, the issue of market share is nonexistent. Apple created a new category of market there and continues to grow the entire market.
      -In PCs and laptops, Apple is rapidly cannibalising a market dominated by Windows machines
      -In electronic content (eBooks, apps, video and music), much of the market has yet to be created or can easily be cannibalised (eg audio CDs, physical DVDs).

      To my mind, Apple has plenty of head room yet.

      And then there’s televisions.

      • Ultimately, continued growth in market share is technically impossible. Once you get to 100%, you’re not getting to 101%.

        Obviously, they aren’t likely to get to 100%, but there has to be a point at which the growth curve isn’t going to go up significantly.

        For Apple, maybe that’s 50%? 60%? Hard to tell – but there is a natural tipping point, somewhere.

      • In mobiles Apples market share has stagnated and leveled off around the world at about 36% (that figure is off the top of my head and is smartphones I believe) android is high 50% and win mobile is a few percent. If win mobile is going to take market share from anywhere is would be more likly to take it from apple and blackberry than android.

        In tablets so near 100% of the market at the moment and it will not lose any of it? Really?
        ICS on android tablets will start a BIG change in tablets if you have a google galaxy nexus you only have to buy an app once buy a game on your phone and it works properly on both no need for a HD version.
        Also Phone and tablet convergence will happen in the android ecosystem the galaxy nexus has a 720p screen resolution current tablets are not that much higher. All google need now is to effectivly advertise that hey you have an android phone all those apps you bought work on an android tablet without that terrible distortion when using a app for iphone on an ipad.

        in PC’s apple is not cannablising windows alot of people buy a mac and then run windows that is what I would do not that I could ever justify the price I would look and then Look at the PC I could build for the price and then build a top of the line PC myself but that is me

        Other content I dont think they will go far with book Amazon is king and can be used across all devices what point is there in buying an iBook which you can only read on one device what if you want a new phone that is not apple goodbye books

        TV is a LOW profit sector add to that the strangle hold people have on content here we will not see an apple TV that is not gimped in this country for years if ever Plus we dont have the pipes for content delivery anyhow I want HD pictures but what we can get is barely SD on iView

  2. AJ
    Posted 26/01/2012 at 10:29 am | Permalink | Reply
    In mobiles Apples market share has stagnated and leveled off around the world at about 36%//////// Sorry completely wrong,Wikipedia have the iPhone sales figures,they sold more phones last year than all the previous years combined.Not bad when the initial reaction to the 4s is taken into consideration. >File:IPhone sales per quarter simple.svg< google that. Box of figures including all of 2011 under first graph.

    • Percent stagnated at 36% of the smartphone market

      The smart phone market went from ~25% in 2010 to ~60% last year BUT that only leaves 40% of the market when the market went up buy almost 40% last year it is not possible to sustain that beyond next year because the market will be at saturation

      So how much of the 40% will buy an iPhone?

      There will be a segment of the market who do not want a smart phone at all say 10-15% so that already leaves potential growth in 2012 as less than in 2011.

      Then what percentage will buy an iPhone over android or Win Mobile If they have not move to a smartphone yet why? Price? Brand? Work?

      Price will lose sales for iphone being a premium product Brand Likely Nokia will get nokia windows phone and Work will Likely move to windows .

      So I am going to predict that apples sales will increase but by a much smaller amount with their total smartphone market share being about 32-34% at best

  3. Hi AJ, fine carry on with your predictions.I’ve pointed out what the figures are up to date. Mostly what I know is year after year people say Apple’s run is going to end, they’re screwed and year after year the pundits are wrong an Apple go from strength to strength.That’s not an opinion that’s a fact.

    • I have never said they are not going to do well next year
      I have just said that Growth at the rate they have gone in the last year is not sustanable especially with current economic conditions which is why I used percentages of markets rather than dollar values as the total market for electronics could plateau for the next couple of years with the current debt crisis.

      If that happens Apple will be hit the hardest in terms of Harware everything of theirs tends to be top dollar and if money is tight what would you buy an apple or something that is cheaper.

      So its not fact that iOS used to be number 1 but is now number 2 by a BIG margin? 43% android to 19% iOS

      For apple to continue marching forward they need a new device and market segment and TV is not it because TV is like smartphones even if they get ahead slightly they will be overwhelemed by products by the big manufactures like Samsung which is already prempting them with no remote motion control like kinect and voice control on their new line and upgradable tvs which dont required a new tv to get the newest smart tv apps.

      • I have never said they are not going to do well next year In mobiles Apples market share has stagnated <AJ……? It doesn't matter I just don't understand why Apple keeps getting hammered,they are an extremely profitable company.Bottom line is they are not liked by some persons for what are not much more than emotive reasons not based in any logic. IT tribalism.

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