A Record 14 Weeks

February 1, 2017

By Jeff Johnson, Developer of Underpass

Yesterday, Apple posted its fiscal 2017 first quarter financial results. Let's look at the raw numbers, comparing with Q1 2016 for year/year changes. (Units are in thousands, revenue is in millions of dollars.)

Product 2016 2017 Change % iPhone units 74,779 78,290 +3,511 +5% iPhone revenue 51,635 54,378 +2,743 +5% iPad units 16,122 13,081 -3,041 -19% iPad revenue 7,084 5,533 -1,551 -22% Mac units 5312 5374 +62 +1% Mac revenue 6,746 7,244 +498 +7% Service revenue 6,056 7,172 +1116 +18% Other revenue 4,351 4,024 -327 -8% Total revenue 75,872 78,351 +2,479 +3%

Apple stated that Q1 FY2017 was an all-time record for quarterly revenue. The media dutifully and mostly uncritically spread this "great" news for Apple. But the headlines were fake news. Technically the claim is true, the revenue was an all-time record. True but misleading. Although Apple didn't lie as such, you might say there was a sin of omission, and a definite spin of the facts. Most Apple fiscal quarters are 13 weeks long. Once in a while, however, they need a 14 week quarter. You might call it a "leap quarter". There was a good explanation of this financial practice a few years ago in Slate. Apple's Q1 2017 was a 14 week quarter, for the first time since Q1 2013.

Instead of looking at the quarterly totals, let's compare the weekly averages for 2016 and 2017:

Product 2016 2017 Change % iPhone units 5,752 5,592 -160 -3% iPhone revenue 3,972 3,884 -88 -2% iPad units 1,240 934 -306 -25% iPad revenue 545 395 -150 -28% Mac units 409 384 -25 -6% Mac revenue 519 517 -2 0% Service revenue 466 512 +46 +10% Other revenue 335 287 -48 -14% Total revenue 5,836 5,597 -239 -4%

What a difference a week makes! Rather than record revenue, we have another down quarter for Apple. The lone bright spot was services; everything else was a year/year decrease.

A 14 week quarter is 8% longer than a 13 week quarter. You can't even begin to compare them usefully without making adjustments.