search

Apple has a problem it doesnt want to talk about

CNN By CNN Published on: November 05, 2018 08:40 (EAT)

The era of rapid iPhone growth ended years ago. Now Apple is making a change to ensure it doesn’t have to talk as much about that problem.

On a conference call Thursday, top Apple executives laid out their plans to stop disclosing the number of iPhones, iPads and Macs it sells each quarter. It’s a move that shocked analysts and only added to jitters around a mixed earnings report.

Daniel Ives, an analyst with Wedbush, called the announcement a “jaw dropper” in an investor note Friday morning, particularly because Apple is at a “critical juncture.” He said Apple is trying to make up for slowing unit sales growth by charging more for its lineup of devices.

Sure enough, in the three month period ending in September, Apple sold just shy of 47 million iPhones, representing 0% growth in the number of smartphones sold from the prior year. In future quarters, the number of iPhones Apple sells could decline — but we probably won’t know about it.

Apple’s Mac and iPad unit sales fell by 2% and 6%, respectively, during the quarter compared to a year ago.
Yet Apple’s overall revenue continues to climb from one year to the next. That’s in large part because the company is hiking prices across the board. Apple made $8 billion more dollars selling iPhones than it did a year earlier (when it sold almost the exact same number of iPhones).
Apple now has not one but two smartphones on the market — the XS and XS Max — with price tags that can exceed $1,000. Apple also recently introduced more expensive iPad Pros and MacBook Airs.
On the call with analysts, Apple CEO Tim Cook tried to explain the decision to do away with unit sales figures by way of a grocery store analogy.
“If you go to the market and you push your cart up to the cashier and she says, or he says, ‘How many units you have in there?’ It doesn’t matter a lot how many units there are in there in terms of the overall value of what’s in the cart.”
What matters now, in other words, isn’t necessarily how many devices Apple sells from one quarter to the next, but how much it makes from the devices sells. That’s a tough pill to swallow for Wall Street.
“The elimination of reporting unit metrics for iPhone, iPad, and Mac is significant — the Street obsesses over them,” Gene Munster, an analyst with Loup Ventures, wrote in a note Friday.
More than that, the decision once again raises concerns about what the next big driver of growth will be for the world’s largest company. Apple has never disclosed unit sales for the Apple Watch, its most recent new hardware category. And despite years of rumors about an Apple Car, there is still nothing on the horizon.

Tags:

iphone Apple Car Apple CEO Tim Cook

Want to send us a story? Submit on Wananchi Reporting on the Citizen Digital App or Send an email to wananchi@royalmedia.co.ke or Send an SMS to 25170 or WhatsApp on 0743570000

Leave a Comment

Comments

No comments yet.

latest stories