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Apple watchers can now see how truly huge the company's iPhone business has become, thanks to a new accounting method the company started using this past quarter.
In less than three years, the iPhone has grown to become Apple's biggest business -- up from zero.
Specifically, during Apple's December quarter, the company reported $5.6 billion of iPhone-related revenue, up 90% year-over-year. That edged out the Mac business ($4.5 billion) and iPod business ($3.4 billion) for the second quarter in a row and the third time ever. It was the first time the iPhone has beat the Mac and iPod businesses by more than $1 billion each.
And this despite Apple missing Wall Street's expectations for iPhone sales, thanks to increased competition from Google Android and other smartphones.
Why the new visibility? During the quarter, Apple started taking advantage of new accounting rules that let it report the vast majority of revenue from iPhones and Apple TV devices immediately. Previously, it had to spread the revenue over 24 months to account for free software updates it would offer those customers.
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Wonder if iPhone sales will increase in this qtr too.
- Apple sold 6.9 M units in the Sep '08 Qtr, but only 4.4M in the Dec '08 (1Q09) holiday quarter. Q/Q drop of 2.5M units.
- iPhone unit sales were 7.4M in Sep '09 / 8.7M in Dec '09 (1Q10).
Q/Q increase of 1.3M units.
It should also be noted that the Sep '08 period included 2M units of channel fill, and ~250K units of channel drawdown in the subsequent quarter, thus on a sell-thru basis , Q/Q was slightly down.
Channel fill in Sep '09 (~500K) was almost double the amount in Dec '09 (~285K),
A sell-thru basis, sequential unit demand rose ~1.7M units (4Q09/1Q10) vs a sequential decrease of ~300K units the previous year (4Q08/1Q09).
Unless the iPhone arrives at new U.S. Carriers this quarter, unit sales almost certainly will see a sequential decrease just due to seasonality as well as the nearing of new model releases.