Analyzing Apple's iPhone Seasonality

Apple Inc.'s AAPL fiscal year first quarter results trumped estimates, primarily on the strength of its cash cow product, the iPhone.

iPhone sales for the quarter came in at a record 78.3 million, well above the estimates from sell-side analysts. However, the number was right on the dot with celebrated Apple analyst Gene Munster, who is now a managing partner at Loup Ventures.

The company shipped a record 78.29 million iPhone units in the first quarter of its fiscal year 2017, up 5 percent year-over-year and a 72 percent spike from a quarter ago. In revenue terms, iPhone sales rose 5 percent year-over-year and 93 percent sequentially to $54.38 billion, or 69.4 percent of the total revenues.

Average selling price of an iPhone was $694.6 in the first quarter compared to $690.5 in the first quarter of 2016 and $618.7 in the fourth quarter of 2016.

Does seasonality impact quarterly unit sales statistics of iPhones? Benzinga looked at units iPhones sales during the different quarters of the year since 2008.

Apple's iPhone shipments in (‘000 Units)

Here are our observations:

• Since 2012, Apple has been selling the maximum number of iPhones in Q1, which encompasses the key holiday selling season.
• From around 20 percent of share of the total sales until 2011, Q1 saw its share improve to 30+ percent since 2012.
• In comparison, the rest of the quarters account for 20+ percentage of the total sales each, with the second quarter ending in March (between 24 to 28 percent share since 2012) having an edge over Q3 (roughly 20 percent share since 2012) and Q4 (21-23 percent share since 2012).
• Apple managed to report positive growth in unit shipments in Q1 2016, a year, when all other quarters saw year-over-year declines in shipments.

Since 2011, most of the iterations of iPhone were released in September, just ahead of the calendar year fourth quarter (Apple's fiscal first quarter). Prior to that, Apple released new iPhones in either June or July. The original iPhone was released on June 29, 2007.

Apart from the seasonality that is impacted by consumer-centric factors, product launch date also has a say on the sales data. It's usually around the period of launch that the celebrated phone is being sold like hot cakes.

The spotlight now shifts to the iPhone 8, which would be the company's 10th anniversary product. It's believed the company will adhere to its recent practice of having a September launch date in a bid to have it ahead of holiday season, hoping to cash in on the holiday frenzy.