Cash For iClunkers? Some Observations On Sequential Apple Revenue Growth

Without trying to take away from Apple's blow out earnings, a quick look at the Apple data sheet breaking down revenue and unit sales by geography points to something rather curious. While unit sales in Q4 were fine, with a modest drop in the US, even as European sales posted the biggest sequential increase on record at 306K (from 1,176K to 1,482K), one wonders just how sustainable this in itself is, now that Europe has officially entered a recession, especially since the incremental revenue in Europe in Q4 was also a record $3.9 billion (of the total $18 billion sequential increase). Yet nowhere was this quarterly surge more evident than in the US: the increase in American sales was a unprecedented $8.1 billion sequentially, from $9.7 billion to $17.7 billion (which means margins are blowing out: how long until FoxConn has something to say about this?). While most of this is to be attributed to the iPhone 4S launch in the quarter, the question then is just how sustainable is the new trendline growth if one normalizes for product cadence (yes, we hate that word too), or the ability of the company to reinvent itself quarter after quarter. With the iPad 3 expected this quarter, and the iPhone 5 the next, will Apple be a "product to product" company going forward, and what happens with baseline revenue growth ex-new product innovation? Or how about self-cannibalization? Not like we are saying anything new here, but the value of Apple is in product innovation, which is nowhere better seen than in the sequential Q4 revenue. Will this innovation ability stay with the new management? And how much of the Q4 sales surge was, sad to say it, the Steve Jobs death factor? Finally, the fact that in Q4 AsiaPac revenues were less than a year prior, does this mean that even with the 4S release, Apple has now lost the Asian market to cheaper, pirated, or Google-based competition? Finally, in a tried and true tradition of instant gratification (credit funded naturally), how much of the explosion in the December 31 quarter sales is simply a "cash for clunker"-like forward shifted of purchases that would have otherwise happened in the first quarter of 2012?

Sequential Mac Unit sales by geography:

Sequential change in total revenues by geography:


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