The Fiksu Blog

The predictive value of Fiksu data: Apple earnings prediction for Q1 2017

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We talk about data a lot at Fiksu. Not surprisingly, it’s almost exclusively through the lens of mobile performance marketing, our specialty. But our massive pipe of mobile data (over 4 billion device profiles and counting) can be used for a lot more than just improving ad targeting: it can also be used to glean higher level industry insights.

We recently looked at data around the release of the last three standard-size iPhones and compared those numbers to subsequent earnings statements from Apple. We found an alignment between phone adoption in the first 90 days and whether or not Apple was able to outperform consensus analyst earnings estimates in the subsequent two quarters.

In Q3 of 2014, Apple launched the iPhone 6. After three months, our data showed adoption at nearly 13% of all iPhones—a historically high rate. In the next two quarters, Q4 2014 and Q1 2015, Apple outperformed the consensus analyst expectations for both revenue and earnings per share (EPS).

Apple’s next major device release, the iPhone 6S, launched in Q3 of 2015. Its adoption was significantly lower than the 6, reaching an adoption rate of only 8.1% after 90 days. The following two quarters were disappointments for Apple, as they fell short of expected revenues and came in just above (Q1) and somewhat short (Q2) of EPS expectations.

In calendar Q2 and Q3 of both years, Apple’s revenue and EPS were essentially on target.

The pattern is not actually surprising: Apple’s financials were better than expected in quarters that followed new device launches that saw strong adoption, and underperformed in the quarters that followed new device launches that lagged. In other quarters, revenue and EPS were in line with expectations.

If this pattern continues, Apple would fall short of expectations in Q4 2016 and Q1 of 2017. iPhone 7 adoption has been historically low, at only 6% after 90 days. Of similar-sized devices, only the downmarket phones (the 5C and SE) have experienced lower relative adoption numbers.

We should point out that we’re not financial analysts, and you should not rely on us to make investment decisions. However, the alignment of adoption rates and performance bears watching—we’ll see if the pattern holds true sometime in late January when Apple has their next earnings announcement.

Phone

Launch

3 month adoption

Q4

Q1

Revenue vs. expectation

Earnings per share vs. expectation

Revenue vs. expectation

Earnings per share vs. expectation

iPhone 6

Q314

12.8%

10.2%

17.7%

3.5%

7.9%

iPhone 6S

Q315

8.1%

-0.9%

1.6%

-2.6%

-5%

iPhone 7

Q316

6.0%

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