We've been through this before. There is a reason sale is qualified by the word channel. You can pretend you don't remember that conversation or claim that shipped = channel sale = sale but you are wrong.
Note they use sales 35 times but channel only once, and only in reference to channel supply. Again, you don't qualify sales with channel unless you are trying to imply something that will fool only the ignorant. They don't pull this kind of crap with SEC filings.
No, Solipsism, you can pretend a channel sale isn't a real sale. Unless of course you have some official SEC or even GAAP claim that it isn't. I think you're only trying to confuse the issue and hope some think there's not clarity when there is.
The SEC is very clear on what constitutes a sale. It Samsung uses the term "sale" to reflect product movement in an official SEC filing or quarterly report to investors you can be assured a sale as defined by the SEC actually took place, just as you can with Apple.
I don't know that unofficial or investor convenience statements are held to the same standards or not, but I suspect they are. I'm not above actually researching to find that out.
The SEC is very clear on what constitutes a sale. It Samsung uses the term "sale" in an official SEC filing or quarterly report to investors you can be assured a sale as defined by the SEC actually took place, just as you can with Apple.
Which is what everyone but you have been saying. If a company refers to a "sale" in their earnings were can assume it's a "sale". but you're trying to say otherwise.
Which is what everyone but you have been saying. If a company refers to a "sale" in their earnings were can assume it's a "sale". but you're trying to say otherwise.
No sir I'm not. Even you attempt to make an imaginary distinction between channel sales and a real sale. I suppose qualifying estimated inventory with the word "channel" as Apple does is also "trying to imply something that will fool only the ignorant."
Mel claims "channel sales" means nothing, and "that's almost the same as stating shipped".
Is that your view too?
hardly a week goes by without someone saying "Apple reports sales, everyone else is just reporting shipped". It's obviously untrue for anyone filing SEC reports, which means most all Apple's competitors. Just like Apple they report sales in the same way the SEC requires.
It's a channel SALE, Mel. You have no background reference for saying that payment arrangements weren't made before product left Samsung's custody, thus it was simply a shipment with no expectations for payment. You're simply throwing a bunch of maybe's around with no factual sources for your suppositions. Since when do accounting principles allow consignments to be counted as recognized revenue, a.k.a. a sale?
Apple also reports channel sales. Are you claiming Apple's numbers are simply shipped too, perhaps some only consignment agreements?? You apparently want the definition of a sale to mean shipped if it's anyone but Apple, and a retail end-user purchase if it's Apple products.
Rather than your mights and maybe's, why not use a standard industry explanation of a channel sale:
An aggregate of all sales generated in a particular period by all the means of distribution (own sales force, dealers, retailers, direct marketing, etc.) employed by a company to move its products to the market.
And just what constitutes a sale?
Let's go directly to the SEC for that.
". . .revenue should not be recognized until it is realized or realizable and earned.2 SFAC No. 5, paragraph 83(b) states that "an entity's revenue-earning activities involve delivering or producing goods, rendering services, or other activities that constitute its ongoing major or central operations, and revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues" [footnote reference omitted]. Paragraph 84(a) continues "the two conditions (being realized or realizable and being earned) are usually met by the time product or merchandise is delivered or services are rendered to customers, and revenues from manufacturing and selling activities and gains and losses from sales of other assets are commonly recognized at time of sale (usually meaning delivery)."
The staff believes that revenue generally is realized or realizable and earned when all of the following criteria are met:
Persuasive evidence of an arrangement exists
Delivery has occurred or services have been rendered
The seller's price to the buyer is fixed or determinable
and
Collectibility is reasonably assured"
This last bold quote is the same found in nearly every manufacturer's 10-K or 10-Q SEC filing, some like Apple going on to state that those conditions are generally met when a product is shipped.
But what about a consignment. You apparently think that could be claimed as a sale?
Nope!
From an SEC Q&A:
Facts: Company Z enters into an arrangement with Customer A to deliver Company Z's products to Customer A on a consignment basis. Pursuant to the terms of the arrangement, Customer A is a consignee, and title to the products does not pass from Company Z to Customer A until Customer A consumes the products in its operations. Company Z delivers product to Customer A under the terms of their arrangement.
Question: May Company Z recognize revenue upon delivery of its product to Customer A?
Interpretive Response: No. Products delivered to a consignee pursuant to a consignment arrangement are not sales and do not qualify for revenue recognition until a sale occurs.
Your guesses about how things work don't jive with the SEC's regulations. I think the SEC might be a bit more reliable source Mel.
If you take the time to read this SEC document it might clear up a few of your misunderstandings on reporting requirements and standards, what constitutes a sale and how shipping and delivery plays into that. It's not that long an article and worth the read.
You're obviously a really smart guy Mel, but you're occasionally prone to posting things that some research might reveal as inaccurate or even completely untrue. That's really the only time we have these disagreements, when you expect whatever you write be accepted an an unquestioned "everyone knows" fact, no citations needed.
You may not like Google as a company, but "Googling" can still be your friend.
Believe it or not, I understand the way it works, I did have two companies. But there's a difference between channel SALES, and products SHIPPED. Channel sales can be a percentage of product shipped, and often is. Samsung stated that they wluld no longer state products SHIPPED, they didn't say they wouldn't announce channel SALES. Channel sales are required for accounting purposes, but shipped numbers can be fudged, because they don't need to have a "paid" agreement, such as when products are consigned.
We see this with companies who announce that they shipped 500,000 the first quarter it's out, and then 200,000 the next, and then 100,000 after that. So, how many we're sold? Likely no more than half, possibly a third, because we don't know how many were sold the last quarter, because we would need a forth quarter's shipments to get an idea. This was RIM's Playbook shipments, by the way, in case you didn't recognize them. Motorola's look about the same.
No, Solipsism, you can pretend a channel sale isn't a real sale. Unless of course you have some official SEC or even GAAP claim that it isn't. I think you're only trying to confuse the issue and hope some think there's not clarity when there is.
The SEC is very clear on what constitutes a sale. It Samsung uses the term "sale" to reflect product movement in an official SEC filing or quarterly report to investors you can be assured a sale as defined by the SEC actually took place, just as you can with Apple.
I don't know that unofficial or investor convenience statements are held to the same standards or not, but I suspect they are. I'm not above actually researching to find that out.
A channel sale is deceiving. Let's look at the deceased Palm to see why. Palm "sold" all of their Pre's to Sprint. So they had about 550,000 channel sales the first quarter. But how many actually sold to the end user? Well, they had a lot less channel sales the second quarter, so they sold only a portion of them, about half actually. Then the quarter after that, channel sales were down again. And well, we know the outcome.
So we've got to see several quarter's worth of channel sales, or shipments to know what actual sales are. Because, if real sales to the customer of the channel are poor, either the unsold ones go back, or they sit in the warehouse getting old.
I have no doubt that Samsung's phone sales are increasing. It's their tablet sales that are really in question. It's been stated by one of these companies that does it, and I'll try to find it later, though no doubt we've all read it, that over the past 6 months, only 1,2 million android tablets have sold. I do believe that. There's no evidence at all that people are buying these things, other than the new Fire, and we have no idea as to how many of those are selling, and the Nook tablet.
No sir I'm not. Even you attempt to make an imaginary distinction between channel sales and a real sale. I suppose qualifying estimated inventory with the word "channel" as Apple does is also "trying to imply something that will fool only the ignorant."
Mel claims "channel sales" means nothing, and "that's almost the same as stating shipped".
Is that your view too?
hardly a week goes by without someone saying "Apple reports sales, everyone else is just reporting shipped". It's obviously untrue for anyone filing SEC reports, which means most all Apple's competitors. Just like Apple they report sales in the same way the SEC requires.
I'm saying that channel sales are deceiving because there is no quarrantee that the channel partner will actually sell the product to the consumer.
Please, you know that's true. Look at what happened to the Touchpad. BB sold almost none, and reports were that no dealer did better. BB wanted HP to take them back, which is usually what happens, but as only about 5% had sold, that was far too much for HP to write off, so they compromised and sold them off for almost nothing.
So HP had about 600,000 SALES into the channel, but almost no real sales. They were lucky that BB allowed then to do what they did, or HP would be sitting on 600,000 useless tablets from all their dealers.
Sales to the channel are a temporary situation. If a product is selling well, it can mean a lot, but if a product isn't selling well, it can mean little.
Yes, a company can book those sales, but they may have to book a loss from returned product as well. But a lot of this can be hidden according to accounting rules, and that's a problem. In addition, companies from overseas don't always need to play by the same rules. Look them up on a US stock exchange.
So if someone were to proclaim that "it doesn't matter, Apple's numbers still stand for sold, while everyone else's still stands for shipped" then it might be inaccurate?
Apple, Samsung, even Motorola subscribe to IFRS guidelines in accordance with GAAP, and thus sold for Apple means the same as sold for Samsung or sold for Motorola.
There's some bloggers and posters putting efforts into making everyone's numbers but Apple's sound unreliable, and implying a channel sale not being what it says it is. Not necessarily throwing you into that group Mel, but it's disingenuous to some to claim "Apple reports sales and everyone else reports shipped". They're all reporting to their investors using the same SEC and IFRA methods and precedures as Apple. If the goal is to report sales revenue, I don't see how reporting channel sales would be deceptive. If instead you're trying to pander to a web blog or forum member who wants to count end-users then I agree channel sales may not be a reliable measure. But how do you reliably count end-users? Who even knows the approximate number of iOS or Android-capable, Google sanctioned devices actually still in use?
I don't know how to count them, and personally I don't even find it an important thing for me to know.
EDIT:
Quote:
Originally Posted by melgross
In addition, companies from overseas don't always need to play by the same rules. Look them up on a US stock exchange.
Actually most if not all the big multinationals like Samsung, Sony, Apple and such follow the same International Financial Reporting Standards (IFRS), which are largely based on Generally Accepted Accounting Principles (GAAP). There's very minor differences, for example the A-IFRS standards followed in Australia, but nothing that would affect the comparative reports of competing companies to any degree. They're all on the same page for the most part.
So if someone were to proclaim that "it doesn't matter, Apple's numbers still stand for sold, while everyone else's still stands for shipped" then it might be inaccurate?
Apple, Samsung, even Motorola subscribe to IFRS guidelines in accordance with GAAP, and thus sold for Apple means the same as sold for Samsung or sold for Motorola.
There's some bloggers and posters putting efforts into making everyone's numbers but Apple's sound unreliable, and implying a channel sale not being what it says it is. Not necessarily throwing you into that group Mel, but it's disingenuous to some to claim "Apple reports sales and everyone else reports shipped". They're all reporting to their investors using the same SEC and IFRA methods and precedures as Apple. If the goal is to report sales revenue, I don't see how reporting channel sales would be deceptive. If instead you're trying to pander to a web blog or forum member who wants to count end-users then I agree channel sales may not be a reliable measure. But how do you reliably count end-users? Who even knows the approximate number of iOS or Android-capable, Google sanctioned devices actually still in use?
I don't know how to count them, and personally I don't even find it an important thing for me to know.
EDIT:
Actually most if not all the big multinationals like Samsung, Sony, Apple and such follow the same International Financial Reporting Standards (IFRS), which are largely based on Generally Accepted Accounting Principles (GAAP). There's very minor differences, for example the A-IFRS standards followed in Australia, but nothing that would affect the comparative reports of competing companies to any degree. They're all on the same page for the most part.
Actually, not all companies follow the same accounting standards. If they're not listed on a Us exchange they don't have to, and some big companies have left the Us stock exchanges because they didn't want to follow US accounting laws which are stricter. This includes EU companies as well as Asian companies.
Actually, not all companies follow the same accounting standards. If they're not listed on a Us exchange they don't have to, and some big companies have left the Us stock exchanges because they didn't want to follow US accounting laws which are stricter. This includes EU companies as well as Asian companies.
And yes, other numbers ARE unreliable.
Which of the other big mobile players aren't following the same accounting rules as Apple? I suggest they all are. Do you have an example of one that isn't?
Which of the other big mobile players aren't following the same accounting rules as Apple? I suggest they all are. Do you have an example of one that isn't?
Your short answer prompted me to dig a bit deeper. You're correct! .
Samsung used GAAP accounting just as Apple currently does up until 2009. Since then they've joined most of the other big multinationals in using international standards, commonly referred to as IFRS, to report results to investors.
But it's not just Samsung. It's nearly every big tech company in the world that uses what has been called by some the "new GAAP". In general IFRS is the recognized worldwide standard for listed company's financial reporting. In the US, the SEC is not yet requiring large companies to report results in accordance with IFRS, meaning Apple may not need to be in compliance with those International standards until perhaps 2015 at the earliest. SEC transition plans for listed US companies to move to IFRS are still not finalized.
So while listed companies in most of the world (Europe, Asia, South America, Africa) have adopted IFRS, many large US companies have chosen to report financial results only under "old" GAAP requirements and SEC guidelines, tho IFRS is permitted under SEC rules.
For a list and map of what countries use IFRS accounting rules:
Thank you for the correction. Mel was right on the basic claim that foreign companies might not report results the same way as Apple. (It is OK to admit when you're wrong here isn't it?)
Had you not brought it to my attention I would never have expected Apple (nor Google for that matter) had still not chosen to move to IFRS when reporting results from worldwide operations. We may have to wait a few more years before Apple reports results in the same form as Motorola, Samsung, Toshiba, Sony, Lenovo, ASUSTEK, or most any other mobile competitor, who all report under the same basic IFRS requirements. Until then it's going to be difficult for most investors to make a clear and direct comparison in financial results between Apple and much of it's competition.
Your short answer prompted me to dig a bit deeper. You're correct! .
Samsung used GAAP accounting just as Apple currently does up until 2009. Since then they've joined most of the other big multinationals in using international standards, commonly referred to as IFRS, to report results to investors.
But it's not just Samsung. It's nearly every big tech company in the world that uses what has been called by some the "new GAAP". In general IFRS is the recognized worldwide standard for listed company's financial reporting. In the US, the SEC is not yet requiring large companies to report results in accordance with IFRS, meaning Apple may not need to be in compliance with those International standards until perhaps 2015 at the earliest. SEC transition plans for listed US companies to move to IFRS are still not finalized.
So while listed companies in most of the world (Europe, Asia, South America, Africa) have adopted IFRS, many large US companies have chosen to report financial results only under "old" GAAP requirements and SEC guidelines, tho IFRS is permitted under SEC rules.
For a list and map of what countries use IFRS accounting rules:
Thank you for the correction. Mel was right on the basic claim that foreign companies might not report results the same way as Apple. (It is OK to admit when you're wrong here isn't it?)
Had you not brought it to my attention I would never have expected Apple (nor Google for that matter) had still not chosen to move to IFRS when reporting results from worldwide operations. We may have to wait a few more years before Apple reports results in the same form as Motorola, Samsung, Toshiba, Sony, Lenovo, ASUSTEK, or most any other mobile competitor, who all report under the same basic IFRS requirements. Until then it's going to be difficult for most investors to make a clear and direct comparison in financial results between Apple and much of it's competition.
Couple of things...
First, after quite a few years on this forum, I have learned that @melgross is correct more often than not and makes well-reasoned posts. We don't aways agree, but I respect his opinions.
Second, As I understand it, Apple (or anyone) need not provide detailed figures, such as number of iPads sold, if it would provide an advantage to competitors. But, if they do, as part of an earnings call/financial reporting -- they must be prepared to defend the numbers if called upon to do so.
I believe that Apple, Google (or anyone) announces additional detail when it suits their purposes, say, to indicate a product has wide acceptance.
With Apple and iOS, since only one company is involved, it is relatively easy to take the numbers provided and reverse engineer or tease other numbers of interest. Apple is aware of this and provides hints and breadcrumbs to those in the know.
With Google and Android, there are so many players involved (official and unofficial forks) it is difficult to even determine if the "activations" are reasonable -- or how much inventory of devices is in the channels. I don't listen to Google's earnings calls so I don't know if they release formal Android numbers... I would guess not. Then, I am not sure if blog posts or tweets by Senior Vice President Andy Rubin are governed by the same guidelines under which Apple presents its numbers.
My take is that Google activations have little meaning because:
1) There is no way to validate them
2) They are not presented in a formal way that requires validation (Rubin cannot be required to back them up)
Then, there is Amazon who gives totally useless numbers.
And, somehow, some analysts can report that the meaningless Android "activations" include (or don't) activations for some nebulous number of Forked Android devices.
Where do they get their numbers? Why should we believe them?
First, after quite a few years on this forum, I have learned that @melgross is correct more often than not and makes well-reasoned posts. We don't aways agree, but I respect his opinions.
Agreed that he's right more often than he's wrong.
Having a citation or two for a questionable claim rather than "everyone knows" or "I read it somewhere" might help readers sort which is which tho, and opinion from fact. I try to follow that guideline myself. That's one reason I could see where I was mistaken, and willing to admit it.
Which of the other big mobile players aren't following the same accounting rules as Apple? I suggest they all are. Do you have an example of one that isn't?
Your short answer prompted me to dig a bit deeper. You're correct! .
Samsung used GAAP accounting just as Apple currently does up until 2009. Since then they've joined most of the other big multinationals in using international standards, commonly referred to as IFRS, to report results to investors.
But it's not just Samsung. It's nearly every big tech company in the world that uses what has been called by some the "new GAAP". In general IFRS is the recognized worldwide standard for listed company's financial reporting. In the US, the SEC is not yet requiring large companies to report results in accordance with IFRS, meaning Apple may not need to be in compliance with those International standards until perhaps 2015 at the earliest. SEC transition plans for listed US companies to move to IFRS are still not finalized.
So while listed companies in most of the world (Europe, Asia, South America, Africa) have adopted IFRS, many large US companies have chosen to report financial results only under "old" GAAP requirements and SEC guidelines, tho IFRS is permitted under SEC rules.
For a list and map of what countries use IFRS accounting rules:
Thank you for the correction. Mel was right on the basic claim that foreign companies might not report results the same way as Apple. (It is OK to admit when you're wrong here isn't it?)
Had you not brought it to my attention I would never have expected Apple (nor Google for that matter) had still not chosen to move to IFRS when reporting results from worldwide operations. We may have to wait a few more years before Apple reports results in the same form as Motorola, Samsung, Toshiba, Sony, Lenovo, ASUSTEK, or most any other mobile competitor, who all report under the same basic IFRS requirements. Until then it's going to be difficult for most investors to make a clear and direct comparison in financial results between Apple and much of it's competition.
If you understood these international standards, you would know that they are laxer than the US accounting standards. Tha ts the reason why a number of companies pulled out of the US exchanges. Japanese and S. Korean accounting practices in particular allow much more concealment of financial activity than does the US.
First, after quite a few years on this forum, I have learned that @melgross is correct more often than not and makes well-reasoned posts. We don't aways agree, but I respect his opinions.
Second, As I understand it, Apple (or anyone) need not provide detailed figures, such as number of iPads sold, if it would provide an advantage to competitors. But, if they do, as part of an earnings call/financial reporting -- they must be prepared to defend the numbers if called upon to do so.
I believe that Apple, Google (or anyone) announces additional detail when it suits their purposes, say, to indicate a product has wide acceptance.
With Apple and iOS, since only one company is involved, it is relatively easy to take the numbers provided and reverse engineer or tease other numbers of interest. Apple is aware of this and provides hints and breadcrumbs to those in the know.
With Google and Android, there are so many players involved (official and unofficial forks) it is difficult to even determine if the "activations" are reasonable -- or how much inventory of devices is in the channels. I don't listen to Google's earnings calls so I don't know if they release formal Android numbers... I would guess not. Then, I am not sure if blog posts or tweets by Senior Vice President Andy Rubin are governed by the same guidelines under which Apple presents its numbers.
My take is that Google activations have little meaning because:
1) There is no way to validate them
2) They are not presented in a formal way that requires validation (Rubin cannot be required to back them up)
Then, there is Amazon who gives totally useless numbers.
And, somehow, some analysts can report that the meaningless Android "activations" include (or don't) activations for some nebulous number of Forked Android devices.
Where do they get their numbers? Why should we believe them?
One problem with the idea of activations is how the number is derived in the sense of when the snapshot is taken. Is it a single day they are measuring? If so, which day? Is the day when some major model comes out so that activations are higher, and then fall afterwards?
If its an average, for when? How long a period?
We don't know any of this, and without knowing it, the numbers are not very useful.
You are aware there's Apple competing companies listed on the NYSE that also use IFRS, right? Example Nokia.
Quote:
Originally Posted by melgross
One problem with the idea of activations is how the number is derived in the sense of when the snapshot is taken. Is it a single day they are measuring? If so, which day? Is the day when some major model comes out so that activations are higher, and then fall afterwards?
Weren't activations claimed as 700K per day? Logically that wouldn't infer one particular single day. If you tell a new full-time hire he'll be paid $200 per day it wouldn't apply to just Wednesday with all the other workdays being less than that.
It's very obviously an average. Over what time period? Why would that matter in light of the steadily increasing numbers reported over the past year or so. It's currently averaging 700K per day according to Andy Rubin.
You are aware there's Apple competing companies listed on the NYSE that also use IFRS, right? Example Nokia.
For the EU financial reporting.
Quote:
Weren't activations claimed as 700K per day? Logically that wouldn't infer one particular single day. If you tell a new full-time hire he'll be paid $200 per day it wouldn't apply to just Wednesday with all the other workdays being less than that.
That means nothing. Per day. What does that mean? You can ASSUME it means for some time, but you don't know that. Per day, during the first three days of the new Galaxy II introduction. Who knows?
Quote:
It's very obviously an average. Over what time period? Why would that matter in light of the steadily increasing numbers reported over the past year or so. It's currently averaging 700K per day according to Andy Rubin.
It's not obvious. And even it it were, we don't know for how long, or when they began counting, or when they ended. It could be for that three day period I mentioned. Apple could have said 1.33 million per day for iOS phones—for the three days the new iPhone 4S sold 4 million.
It's just not very meaningful. It's just useful if we compare it to the year before. But even then, we still don't know if they're juggling when they measured.
Here's a good solution. Google should take the data they get from the Android phone manufacturers, which they no doubt have, and tell us the total number of phones that were sold to the end user during a given month or quarter. Then there wouldn't be any controversy.
That means nothing. Per day. What does that mean? You can ASSUME it means for some time, but you don't know that. . .
It's not obvious. And even it it were, we don't know for how long, or when they began counting, or when they ended. . . .
Geez Mel. . .
Since you're never wrong, post FUD or create strawmen, there's nothing to gain by pointing out with another example just how silly you now sound. There would still be nothing questionable in any of your statements.
I'm rendered speechless since confronted by your well-reasoned and logical post.
Since you're never wrong, post FUD or create strawmen, there's nothing to gain by pointing out with another example just how silly you now sound. There would still be nothing questionable in any of your statements.
I'm rendered speechless since confronted by your well-reasoned and logical post.
I think it's great that you find it necessary to remove my examples in order to show how your useless "logic" is correct, and how mine isn't. You have no real response, so mangle my post, and pretend you're superior. Works every time for you.
Comments
We've been through this before. There is a reason sale is qualified by the word channel. You can pretend you don't remember that conversation or claim that shipped = channel sale = sale but you are wrong.
Here is Samsung's earning for Q3-2011.
- http://www.samsung.com/us/aboutsamsu...erence_eng.pdf (PDF, 800KB)
Note they use sales 35 times but channel only once, and only in reference to channel supply. Again, you don't qualify sales with channel unless you are trying to imply something that will fool only the ignorant. They don't pull this kind of crap with SEC filings.No, Solipsism, you can pretend a channel sale isn't a real sale. Unless of course you have some official SEC or even GAAP claim that it isn't. I think you're only trying to confuse the issue and hope some think there's not clarity when there is.
The SEC is very clear on what constitutes a sale. It Samsung uses the term "sale" to reflect product movement in an official SEC filing or quarterly report to investors you can be assured a sale as defined by the SEC actually took place, just as you can with Apple.
I don't know that unofficial or investor convenience statements are held to the same standards or not, but I suspect they are. I'm not above actually researching to find that out.
The SEC is very clear on what constitutes a sale. It Samsung uses the term "sale" in an official SEC filing or quarterly report to investors you can be assured a sale as defined by the SEC actually took place, just as you can with Apple.
Which is what everyone but you have been saying. If a company refers to a "sale" in their earnings were can assume it's a "sale". but you're trying to say otherwise.
Which is what everyone but you have been saying. If a company refers to a "sale" in their earnings were can assume it's a "sale". but you're trying to say otherwise.
No sir I'm not. Even you attempt to make an imaginary distinction between channel sales and a real sale. I suppose qualifying estimated inventory with the word "channel" as Apple does is also "trying to imply something that will fool only the ignorant."
Mel claims "channel sales" means nothing, and "that's almost the same as stating shipped".
Is that your view too?
hardly a week goes by without someone saying "Apple reports sales, everyone else is just reporting shipped". It's obviously untrue for anyone filing SEC reports, which means most all Apple's competitors. Just like Apple they report sales in the same way the SEC requires.
It's a channel SALE, Mel. You have no background reference for saying that payment arrangements weren't made before product left Samsung's custody, thus it was simply a shipment with no expectations for payment. You're simply throwing a bunch of maybe's around with no factual sources for your suppositions. Since when do accounting principles allow consignments to be counted as recognized revenue, a.k.a. a sale?
Apple also reports channel sales. Are you claiming Apple's numbers are simply shipped too, perhaps some only consignment agreements?? You apparently want the definition of a sale to mean shipped if it's anyone but Apple, and a retail end-user purchase if it's Apple products.
Rather than your mights and maybe's, why not use a standard industry explanation of a channel sale:
An aggregate of all sales generated in a particular period by all the means of distribution (own sales force, dealers, retailers, direct marketing, etc.) employed by a company to move its products to the market.
And just what constitutes a sale?
Let's go directly to the SEC for that.
". . .revenue should not be recognized until it is realized or realizable and earned.2 SFAC No. 5, paragraph 83(b) states that "an entity's revenue-earning activities involve delivering or producing goods, rendering services, or other activities that constitute its ongoing major or central operations, and revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues" [footnote reference omitted]. Paragraph 84(a) continues "the two conditions (being realized or realizable and being earned) are usually met by the time product or merchandise is delivered or services are rendered to customers, and revenues from manufacturing and selling activities and gains and losses from sales of other assets are commonly recognized at time of sale (usually meaning delivery)."
The staff believes that revenue generally is realized or realizable and earned when all of the following criteria are met:
Persuasive evidence of an arrangement exists
Delivery has occurred or services have been rendered
The seller's price to the buyer is fixed or determinable
and
Collectibility is reasonably assured"
This last bold quote is the same found in nearly every manufacturer's 10-K or 10-Q SEC filing, some like Apple going on to state that those conditions are generally met when a product is shipped.
But what about a consignment. You apparently think that could be claimed as a sale?
Nope!
From an SEC Q&A:
Facts: Company Z enters into an arrangement with Customer A to deliver Company Z's products to Customer A on a consignment basis. Pursuant to the terms of the arrangement, Customer A is a consignee, and title to the products does not pass from Company Z to Customer A until Customer A consumes the products in its operations. Company Z delivers product to Customer A under the terms of their arrangement.
Question: May Company Z recognize revenue upon delivery of its product to Customer A?
Interpretive Response: No. Products delivered to a consignee pursuant to a consignment arrangement are not sales and do not qualify for revenue recognition until a sale occurs.
Your guesses about how things work don't jive with the SEC's regulations. I think the SEC might be a bit more reliable source Mel.
If you take the time to read this SEC document it might clear up a few of your misunderstandings on reporting requirements and standards, what constitutes a sale and how shipping and delivery plays into that. It's not that long an article and worth the read.
http://www.sec.gov/interps/account/sab101.htm
You're obviously a really smart guy Mel, but you're occasionally prone to posting things that some research might reveal as inaccurate or even completely untrue. That's really the only time we have these disagreements, when you expect whatever you write be accepted an an unquestioned "everyone knows" fact, no citations needed.
You may not like Google as a company, but "Googling" can still be your friend.
Believe it or not, I understand the way it works, I did have two companies. But there's a difference between channel SALES, and products SHIPPED. Channel sales can be a percentage of product shipped, and often is. Samsung stated that they wluld no longer state products SHIPPED, they didn't say they wouldn't announce channel SALES. Channel sales are required for accounting purposes, but shipped numbers can be fudged, because they don't need to have a "paid" agreement, such as when products are consigned.
We see this with companies who announce that they shipped 500,000 the first quarter it's out, and then 200,000 the next, and then 100,000 after that. So, how many we're sold? Likely no more than half, possibly a third, because we don't know how many were sold the last quarter, because we would need a forth quarter's shipments to get an idea. This was RIM's Playbook shipments, by the way, in case you didn't recognize them. Motorola's look about the same.
No, Solipsism, you can pretend a channel sale isn't a real sale. Unless of course you have some official SEC or even GAAP claim that it isn't. I think you're only trying to confuse the issue and hope some think there's not clarity when there is.
The SEC is very clear on what constitutes a sale. It Samsung uses the term "sale" to reflect product movement in an official SEC filing or quarterly report to investors you can be assured a sale as defined by the SEC actually took place, just as you can with Apple.
I don't know that unofficial or investor convenience statements are held to the same standards or not, but I suspect they are. I'm not above actually researching to find that out.
A channel sale is deceiving. Let's look at the deceased Palm to see why. Palm "sold" all of their Pre's to Sprint. So they had about 550,000 channel sales the first quarter. But how many actually sold to the end user? Well, they had a lot less channel sales the second quarter, so they sold only a portion of them, about half actually. Then the quarter after that, channel sales were down again. And well, we know the outcome.
So we've got to see several quarter's worth of channel sales, or shipments to know what actual sales are. Because, if real sales to the customer of the channel are poor, either the unsold ones go back, or they sit in the warehouse getting old.
I have no doubt that Samsung's phone sales are increasing. It's their tablet sales that are really in question. It's been stated by one of these companies that does it, and I'll try to find it later, though no doubt we've all read it, that over the past 6 months, only 1,2 million android tablets have sold. I do believe that. There's no evidence at all that people are buying these things, other than the new Fire, and we have no idea as to how many of those are selling, and the Nook tablet.
No sir I'm not. Even you attempt to make an imaginary distinction between channel sales and a real sale. I suppose qualifying estimated inventory with the word "channel" as Apple does is also "trying to imply something that will fool only the ignorant."
Mel claims "channel sales" means nothing, and "that's almost the same as stating shipped".
Is that your view too?
hardly a week goes by without someone saying "Apple reports sales, everyone else is just reporting shipped". It's obviously untrue for anyone filing SEC reports, which means most all Apple's competitors. Just like Apple they report sales in the same way the SEC requires.
I'm saying that channel sales are deceiving because there is no quarrantee that the channel partner will actually sell the product to the consumer.
Please, you know that's true. Look at what happened to the Touchpad. BB sold almost none, and reports were that no dealer did better. BB wanted HP to take them back, which is usually what happens, but as only about 5% had sold, that was far too much for HP to write off, so they compromised and sold them off for almost nothing.
So HP had about 600,000 SALES into the channel, but almost no real sales. They were lucky that BB allowed then to do what they did, or HP would be sitting on 600,000 useless tablets from all their dealers.
Sales to the channel are a temporary situation. If a product is selling well, it can mean a lot, but if a product isn't selling well, it can mean little.
Yes, a company can book those sales, but they may have to book a loss from returned product as well. But a lot of this can be hidden according to accounting rules, and that's a problem. In addition, companies from overseas don't always need to play by the same rules. Look them up on a US stock exchange.
Apple, Samsung, even Motorola subscribe to IFRS guidelines in accordance with GAAP, and thus sold for Apple means the same as sold for Samsung or sold for Motorola.
There's some bloggers and posters putting efforts into making everyone's numbers but Apple's sound unreliable, and implying a channel sale not being what it says it is. Not necessarily throwing you into that group Mel, but it's disingenuous to some to claim "Apple reports sales and everyone else reports shipped". They're all reporting to their investors using the same SEC and IFRA methods and precedures as Apple. If the goal is to report sales revenue, I don't see how reporting channel sales would be deceptive. If instead you're trying to pander to a web blog or forum member who wants to count end-users then I agree channel sales may not be a reliable measure. But how do you reliably count end-users? Who even knows the approximate number of iOS or Android-capable, Google sanctioned devices actually still in use?
I don't know how to count them, and personally I don't even find it an important thing for me to know.
EDIT:
In addition, companies from overseas don't always need to play by the same rules. Look them up on a US stock exchange.
Actually most if not all the big multinationals like Samsung, Sony, Apple and such follow the same International Financial Reporting Standards (IFRS), which are largely based on Generally Accepted Accounting Principles (GAAP). There's very minor differences, for example the A-IFRS standards followed in Australia, but nothing that would affect the comparative reports of competing companies to any degree. They're all on the same page for the most part.
So if someone were to proclaim that "it doesn't matter, Apple's numbers still stand for sold, while everyone else's still stands for shipped" then it might be inaccurate?
Apple, Samsung, even Motorola subscribe to IFRS guidelines in accordance with GAAP, and thus sold for Apple means the same as sold for Samsung or sold for Motorola.
There's some bloggers and posters putting efforts into making everyone's numbers but Apple's sound unreliable, and implying a channel sale not being what it says it is. Not necessarily throwing you into that group Mel, but it's disingenuous to some to claim "Apple reports sales and everyone else reports shipped". They're all reporting to their investors using the same SEC and IFRA methods and precedures as Apple. If the goal is to report sales revenue, I don't see how reporting channel sales would be deceptive. If instead you're trying to pander to a web blog or forum member who wants to count end-users then I agree channel sales may not be a reliable measure. But how do you reliably count end-users? Who even knows the approximate number of iOS or Android-capable, Google sanctioned devices actually still in use?
I don't know how to count them, and personally I don't even find it an important thing for me to know.
EDIT:
Actually most if not all the big multinationals like Samsung, Sony, Apple and such follow the same International Financial Reporting Standards (IFRS), which are largely based on Generally Accepted Accounting Principles (GAAP). There's very minor differences, for example the A-IFRS standards followed in Australia, but nothing that would affect the comparative reports of competing companies to any degree. They're all on the same page for the most part.
Actually, not all companies follow the same accounting standards. If they're not listed on a Us exchange they don't have to, and some big companies have left the Us stock exchanges because they didn't want to follow US accounting laws which are stricter. This includes EU companies as well as Asian companies.
And yes, other numbers ARE unreliable.
Actually, not all companies follow the same accounting standards. If they're not listed on a Us exchange they don't have to, and some big companies have left the Us stock exchanges because they didn't want to follow US accounting laws which are stricter. This includes EU companies as well as Asian companies.
And yes, other numbers ARE unreliable.
Which of the other big mobile players aren't following the same accounting rules as Apple? I suggest they all are. Do you have an example of one that isn't?
Which of the other big mobile players aren't following the same accounting rules as Apple? I suggest they all are. Do you have an example of one that isn't?
Smooth Sammy, for one!
Smooth Sammy, for one!
Your short answer prompted me to dig a bit deeper. You're correct! .
Samsung used GAAP accounting just as Apple currently does up until 2009. Since then they've joined most of the other big multinationals in using international standards, commonly referred to as IFRS, to report results to investors.
But it's not just Samsung. It's nearly every big tech company in the world that uses what has been called by some the "new GAAP". In general IFRS is the recognized worldwide standard for listed company's financial reporting. In the US, the SEC is not yet requiring large companies to report results in accordance with IFRS, meaning Apple may not need to be in compliance with those International standards until perhaps 2015 at the earliest. SEC transition plans for listed US companies to move to IFRS are still not finalized.
http://www.pwc.com/us/en/issues/ifrs...s-status.jhtml
So while listed companies in most of the world (Europe, Asia, South America, Africa) have adopted IFRS, many large US companies have chosen to report financial results only under "old" GAAP requirements and SEC guidelines, tho IFRS is permitted under SEC rules.
For a list and map of what countries use IFRS accounting rules:
http://www.iasplus.com/country/useias.htm
http://www.pwc.com/us/en/issues/ifrs...untry-adoption
Thank you for the correction. Mel was right on the basic claim that foreign companies might not report results the same way as Apple. (It is OK to admit when you're wrong here isn't it?
Had you not brought it to my attention I would never have expected Apple (nor Google for that matter) had still not chosen to move to IFRS when reporting results from worldwide operations. We may have to wait a few more years before Apple reports results in the same form as Motorola, Samsung, Toshiba, Sony, Lenovo, ASUSTEK, or most any other mobile competitor, who all report under the same basic IFRS requirements. Until then it's going to be difficult for most investors to make a clear and direct comparison in financial results between Apple and much of it's competition.
Your short answer prompted me to dig a bit deeper. You're correct! .
Samsung used GAAP accounting just as Apple currently does up until 2009. Since then they've joined most of the other big multinationals in using international standards, commonly referred to as IFRS, to report results to investors.
But it's not just Samsung. It's nearly every big tech company in the world that uses what has been called by some the "new GAAP". In general IFRS is the recognized worldwide standard for listed company's financial reporting. In the US, the SEC is not yet requiring large companies to report results in accordance with IFRS, meaning Apple may not need to be in compliance with those International standards until perhaps 2015 at the earliest. SEC transition plans for listed US companies to move to IFRS are still not finalized.
http://www.pwc.com/us/en/issues/ifrs...s-status.jhtml
So while listed companies in most of the world (Europe, Asia, South America, Africa) have adopted IFRS, many large US companies have chosen to report financial results only under "old" GAAP requirements and SEC guidelines, tho IFRS is permitted under SEC rules.
For a list and map of what countries use IFRS accounting rules:
http://www.iasplus.com/country/useias.htm
http://www.pwc.com/us/en/issues/ifrs...untry-adoption
Thank you for the correction. Mel was right on the basic claim that foreign companies might not report results the same way as Apple. (It is OK to admit when you're wrong here isn't it?
Had you not brought it to my attention I would never have expected Apple (nor Google for that matter) had still not chosen to move to IFRS when reporting results from worldwide operations. We may have to wait a few more years before Apple reports results in the same form as Motorola, Samsung, Toshiba, Sony, Lenovo, ASUSTEK, or most any other mobile competitor, who all report under the same basic IFRS requirements. Until then it's going to be difficult for most investors to make a clear and direct comparison in financial results between Apple and much of it's competition.
Couple of things...
First, after quite a few years on this forum, I have learned that @melgross is correct more often than not and makes well-reasoned posts. We don't aways agree, but I respect his opinions.
Second, As I understand it, Apple (or anyone) need not provide detailed figures, such as number of iPads sold, if it would provide an advantage to competitors. But, if they do, as part of an earnings call/financial reporting -- they must be prepared to defend the numbers if called upon to do so.
I believe that Apple, Google (or anyone) announces additional detail when it suits their purposes, say, to indicate a product has wide acceptance.
With Apple and iOS, since only one company is involved, it is relatively easy to take the numbers provided and reverse engineer or tease other numbers of interest. Apple is aware of this and provides hints and breadcrumbs to those in the know.
With Google and Android, there are so many players involved (official and unofficial forks) it is difficult to even determine if the "activations" are reasonable -- or how much inventory of devices is in the channels. I don't listen to Google's earnings calls so I don't know if they release formal Android numbers... I would guess not. Then, I am not sure if blog posts or tweets by Senior Vice President Andy Rubin are governed by the same guidelines under which Apple presents its numbers.
My take is that Google activations have little meaning because:
1) There is no way to validate them
2) They are not presented in a formal way that requires validation (Rubin cannot be required to back them up)
Then, there is Amazon who gives totally useless numbers.
And, somehow, some analysts can report that the meaningless Android "activations" include (or don't) activations for some nebulous number of Forked Android devices.
Where do they get their numbers? Why should we believe them?
First, after quite a few years on this forum, I have learned that @melgross is correct more often than not and makes well-reasoned posts. We don't aways agree, but I respect his opinions.
Agreed that he's right more often than he's wrong.
Having a citation or two for a questionable claim rather than "everyone knows" or "I read it somewhere" might help readers sort which is which tho, and opinion from fact. I try to follow that guideline myself. That's one reason I could see where I was mistaken, and willing to admit it.
Which of the other big mobile players aren't following the same accounting rules as Apple? I suggest they all are. Do you have an example of one that isn't?
All of the ones not listed on US exchanges.
Your short answer prompted me to dig a bit deeper. You're correct! .
Samsung used GAAP accounting just as Apple currently does up until 2009. Since then they've joined most of the other big multinationals in using international standards, commonly referred to as IFRS, to report results to investors.
But it's not just Samsung. It's nearly every big tech company in the world that uses what has been called by some the "new GAAP". In general IFRS is the recognized worldwide standard for listed company's financial reporting. In the US, the SEC is not yet requiring large companies to report results in accordance with IFRS, meaning Apple may not need to be in compliance with those International standards until perhaps 2015 at the earliest. SEC transition plans for listed US companies to move to IFRS are still not finalized.
http://www.pwc.com/us/en/issues/ifrs...s-status.jhtml
So while listed companies in most of the world (Europe, Asia, South America, Africa) have adopted IFRS, many large US companies have chosen to report financial results only under "old" GAAP requirements and SEC guidelines, tho IFRS is permitted under SEC rules.
For a list and map of what countries use IFRS accounting rules:
http://www.iasplus.com/country/useias.htm
http://www.pwc.com/us/en/issues/ifrs...untry-adoption
Thank you for the correction. Mel was right on the basic claim that foreign companies might not report results the same way as Apple. (It is OK to admit when you're wrong here isn't it?
Had you not brought it to my attention I would never have expected Apple (nor Google for that matter) had still not chosen to move to IFRS when reporting results from worldwide operations. We may have to wait a few more years before Apple reports results in the same form as Motorola, Samsung, Toshiba, Sony, Lenovo, ASUSTEK, or most any other mobile competitor, who all report under the same basic IFRS requirements. Until then it's going to be difficult for most investors to make a clear and direct comparison in financial results between Apple and much of it's competition.
If you understood these international standards, you would know that they are laxer than the US accounting standards. Tha ts the reason why a number of companies pulled out of the US exchanges. Japanese and S. Korean accounting practices in particular allow much more concealment of financial activity than does the US.
Couple of things...
First, after quite a few years on this forum, I have learned that @melgross is correct more often than not and makes well-reasoned posts. We don't aways agree, but I respect his opinions.
Second, As I understand it, Apple (or anyone) need not provide detailed figures, such as number of iPads sold, if it would provide an advantage to competitors. But, if they do, as part of an earnings call/financial reporting -- they must be prepared to defend the numbers if called upon to do so.
I believe that Apple, Google (or anyone) announces additional detail when it suits their purposes, say, to indicate a product has wide acceptance.
With Apple and iOS, since only one company is involved, it is relatively easy to take the numbers provided and reverse engineer or tease other numbers of interest. Apple is aware of this and provides hints and breadcrumbs to those in the know.
With Google and Android, there are so many players involved (official and unofficial forks) it is difficult to even determine if the "activations" are reasonable -- or how much inventory of devices is in the channels. I don't listen to Google's earnings calls so I don't know if they release formal Android numbers... I would guess not. Then, I am not sure if blog posts or tweets by Senior Vice President Andy Rubin are governed by the same guidelines under which Apple presents its numbers.
My take is that Google activations have little meaning because:
1) There is no way to validate them
2) They are not presented in a formal way that requires validation (Rubin cannot be required to back them up)
Then, there is Amazon who gives totally useless numbers.
And, somehow, some analysts can report that the meaningless Android "activations" include (or don't) activations for some nebulous number of Forked Android devices.
Where do they get their numbers? Why should we believe them?
One problem with the idea of activations is how the number is derived in the sense of when the snapshot is taken. Is it a single day they are measuring? If so, which day? Is the day when some major model comes out so that activations are higher, and then fall afterwards?
If its an average, for when? How long a period?
We don't know any of this, and without knowing it, the numbers are not very useful.
All of the ones not listed on US exchanges.
You are aware there's Apple competing companies listed on the NYSE that also use IFRS, right? Example Nokia.
One problem with the idea of activations is how the number is derived in the sense of when the snapshot is taken. Is it a single day they are measuring? If so, which day? Is the day when some major model comes out so that activations are higher, and then fall afterwards?
Weren't activations claimed as 700K per day? Logically that wouldn't infer one particular single day. If you tell a new full-time hire he'll be paid $200 per day it wouldn't apply to just Wednesday with all the other workdays being less than that.
It's very obviously an average. Over what time period? Why would that matter in light of the steadily increasing numbers reported over the past year or so. It's currently averaging 700K per day according to Andy Rubin.
You are aware there's Apple competing companies listed on the NYSE that also use IFRS, right? Example Nokia.
For the EU financial reporting.
Weren't activations claimed as 700K per day? Logically that wouldn't infer one particular single day. If you tell a new full-time hire he'll be paid $200 per day it wouldn't apply to just Wednesday with all the other workdays being less than that.
That means nothing. Per day. What does that mean? You can ASSUME it means for some time, but you don't know that. Per day, during the first three days of the new Galaxy II introduction. Who knows?
It's very obviously an average. Over what time period? Why would that matter in light of the steadily increasing numbers reported over the past year or so. It's currently averaging 700K per day according to Andy Rubin.
It's not obvious. And even it it were, we don't know for how long, or when they began counting, or when they ended. It could be for that three day period I mentioned. Apple could have said 1.33 million per day for iOS phones—for the three days the new iPhone 4S sold 4 million.
It's just not very meaningful. It's just useful if we compare it to the year before. But even then, we still don't know if they're juggling when they measured.
Here's a good solution. Google should take the data they get from the Android phone manufacturers, which they no doubt have, and tell us the total number of phones that were sold to the end user during a given month or quarter. Then there wouldn't be any controversy.
That means nothing. Per day. What does that mean? You can ASSUME it means for some time, but you don't know that. . .
It's not obvious. And even it it were, we don't know for how long, or when they began counting, or when they ended. . . .
Geez Mel. . .
Since you're never wrong, post FUD or create strawmen, there's nothing to gain by pointing out with another example just how silly you now sound. There would still be nothing questionable in any of your statements.
I'm rendered speechless since confronted by your well-reasoned and logical post.
Geez Mel. . .
Since you're never wrong, post FUD or create strawmen, there's nothing to gain by pointing out with another example just how silly you now sound. There would still be nothing questionable in any of your statements.
I'm rendered speechless since confronted by your well-reasoned and logical post.
I think it's great that you find it necessary to remove my examples in order to show how your useless "logic" is correct, and how mine isn't. You have no real response, so mangle my post, and pretend you're superior. Works every time for you.
Meanwhile, you still have fractured reasoning.