AppleCare UK Research Update
2023 UK Sales Estimates
After reading a very useful article1 from the excellent Warranty Week several years ago, I’ve always kept an eye on the deferred revenue lines in the Apple Retail UK Limited (04996702) filed accounts2.
Warranty Week used these accounting lines in Apple’s SEC filings to estimate AppleCare sales on the basis that revenue would need to be deferred over a two year period to match the cover period. Current deferred revenue would include gift-card sales.
Apply that to Apple’s UK entity and we can pick up the short term and long term deferred revenue on the limited company filings and apply the same caveat as Warranty Week in that at best, this is educated guesswork.
From Apple’s most recent UK retail entity filing, we can see that estimated AppleCare sales have dropped slightly from £27.7m in 2022 to £27.3m in 2023 (-1.6%YoY). AppleCare sales as a percentage of product sales also dropped from 2.21% to 2.10%. Peak sales as a percentage of product revenue occurred in 2021 at 2.44%.
It’s difficult to come to any conclusions with the COVID years slap bang in the middle of the five year analysis period. Product sales are dawdling along at a 3.55% CAGR and whilst AppleCare sales have outpaced that at a 7.40% CAGR, they are skewed by the significant jump between 2021 and 2022 (43.74%) as we emerged from lockdown.
The drop off in AppleCare revenues this year might simply be sales falling back to a more usual attachment rate. Probably not going to bother AIG too much.
The calculations/assumptions go thus:
All sales are from the UK.
AppleCare policies sold by other distributors are not included in the retail entity sales. For example, I’m assuming AppleCare policies sold by EE are bought “wholesale” from another Apple entity, not the UK retail entity.
Short-term deferred revenue minus long-term deferred revenue equals gift-card sales in the year because they can be spent anytime.
Long-term deferred revenue multiplied by two equals AppleCare sales in the year. Yes, there’s most likely some other stuff in the deferred sales line, but let’s pretend is immaterial.
Apple Retail UK Limited does not publish product line revenues but Apple Inc. does. I use that to derive the Apple Retail UK Limited product only sales from the total revenue to give us the percentages.
Peace.
sb.
NB. If you’re a paying subscriber, you may note a slightly different number for Apple Retail AppleCare in the UK Mobile Device Insurance study. This is due to that study using a different methodology to calculate market size. However, the variance is 2.8%, so I’ll take that as confirmation I’m in the ball park.
https://www.warrantyweek.com/archive/ww20201105.html
https://find-and-update.company-information.service.gov.uk/company/04996702