Originally Posted by anantksundaram
If you don't understand the basics of revenue recognition -- and the seriousness that it entails by way of penalties for misrepresentation -- and the difference between that and the weasel-y notion of some consultant-generated "shipments" number, I am not even going to try to start. There is no law that says that you can't wallow in ignorance.
I will give you a hint though, if you're truly interested in learning: you want to combine the audited sales data with the "channel inventory" number that Apple always reports (or brings up in its conf call with analysts) to get at how many are actually in consumers' hands.
Excuse me, why the anger?
From Apples SEC report
"Net sales consist primarily of revenue from the sale of hardware, software, digital content and applications, peripherals, and service
and support contracts. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred,
the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been
shipped and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the
product is shipped.
For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, the
Company defers recognition of revenue until the customer receives the product because the Company retains a portion of the risk of
loss on these sales during transit. The Company recognizes revenue from the sale of hardware products, software bundled with
hardware that is essential to the functionality of the hardware, and third-party digital content sold on the iTunes Store in accordance
with general revenue recognition accounting guidance. The Company recognizes revenue in accordance with industry specific
software accounting guidance for the following types of sales transactions: (i) standalone sales of software products, (ii) sales of
software upgrades and (iii) sales of software bundled with hardware not essential to the functionality of the hardware."
If you are not happy with them, please contact Apple, for they have said this, not me.
If I went and purchased a Phone from Vodafone today, Apple would have recognised that sale weeks ago when they shipped it to Brightpoint, and Brightpoint would have recognised it when they shipped it to Vodafone. Apple has no real visibility into these smaller resellers to see when it has been actually sold to a consumer, nor do they declare in the above declaration that they delay the receipt of the sale until the customer has activated the device, as they said, they recognise it when they ship it.