With untold numbers of late-arrival AirPods on top.
Last year at this time, Apple had already closed the books on its all-important Christmas quarter. This year the company gets to add an extra seven days of sales. Reader Robert Paul Leitao of the Braeburn Group explains:
Ordinarily Apple’s fiscal quarters are exactly 13 weeks in length and always end on a Saturday. Because 365 days are not wholly divisible by 7, there’s a reminder day each year (2 days in a leap year). To realign the company’s fiscal quarters with calendar quarters, every 5 or 6 years (depending on the number of leap days in the multi-year period) Apple adds a 14th week to its first fiscal quarter. The last time this occurred was FQ1 2012 (the December-ending calendar quarter of 2011).
Wells Fargo analyst Maynard Um estimates that Apple could sell an extra 3 million iPhones in this, the 14th week of fiscal Q1 sales. RBC’s Amit Daryanani puts the number at 5 to 6 million. Neither analyst factored in the untold numbers of AirPod sales that will flow to Apple’s books this quarter
In fact, the late arrival of those AirPods—scheduled for late October, not available until the week before Christmas, nearly two months late—puts an odd twist on the first two quarters of Apple’s fiscal 2017. The earbuds would have made dandy stocking stuffers if they had been available in quantity last week. Apple probably left a big pile holiday money on the table—some of which it will get back this week, thanks to the anomaly in its fiscal calendar.
Here’s the twist: Whatever revenue Apple had to forgo in fiscal Q1 (already headed for an all-time record), it can expect to get back in Q2, when AirPods should be plentiful.
Good listening: AirPods and the Battle for Our Ears. Neil Cybart argues in Above Avalon podcast Episode 85 that Apple may have just captured first-mover advantage. Having spent nearly week showing off my AirPods to friends and family, I’m inclined to agree.