Why the end of unit sales reporting of Macs, iPhone, and iPad isn't bad news for Apple

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  • Reply 41 of 54
    avon b7 said:
    lkrupp said:
    lkrupp said:
    Apple stock down 20% in the last 3 months. I’m all for Apple no longer providing unit sales data but if they’re going to stop providing it they need to come up with better metrics and a more compelling narrative. Otherwise the narrative becomes Apple stopped providing this data because they’re not growing and they won’t be able to raise prices to offset the lack of unit growth forever. How about Apple provide information on active install base and average revenue per user?
    Until they once again report record revenue and profit. Then no one will care anymore. Once more the requirements for Apple are different than that of its competitors. Samsung and Google don't report unit sales and that’s okay. We have no idea how many Galaxy S9s Samsung are selling. Apple does the same thing and it’s hiding something. Android fans like to call Apple fans sheep and lemmings. The true sheep and lemmings are the herds of investors that panic at the drop of the hat and it's not only AAPL. Wait for it because somebody is going to start the death spiral clock on Apple any day now.
    The problem is Apple was providing this information and now is not. I don’t remember Samsung or Google ever providing it. If Apple is going to stop providing unit sales because it’s not meaningful then provide something that is meaningful.
    They’ll provide the same information as Samsung or Google, namely income and profit, eps, you know, the usual stuff that investors need and is required by the SEC. In a few months no one will care how many iPhones are being sold as long as the income and profit numbers are good. You think Apple doesn’t know that iPhone sales will eventually plateau? You think Apple doesn’t know that they have to diversify their business model? Why else would Apple be hell bent on services these days? It’s the tech blogs and analysts that still think Apple’s life depends on iPhone sales and that without that Apple goes away quickly.
    If we look at the data we have to hand we can already conclude that iPhones might have plateaued. Of course, that in turn might also be one of the reasons Apple has now decided to stop reporting unit sales. For all the blustering about past failed analysis and projections, there is also the chance that, this year, those projections could actually be right.

    It's important to not lose sight of that.

    As for Singles' Day, it is just that - one day - and in this piece, from one vendor (Alibaba) with seemingly nothing to support it save for one report from CNBC which provided no way to verify the information (at least the last time I checked) and when I went through Alibaba's post event press releases I could find no trace of the reference either. What is clear though is that all numbers were revenue numbers and not unit numbers. Hardly surprising news then and puts the terms 'outsold' and 'demand' into some context. One day has very little weight as a minute snapshot that cannot even be verified (as far aa I can tell).

    From an investment perspective, true investors probably know full well that iPhone unit shipments could dip at some point but as long as iPhone dependency is being reduced and is balanced out by other revenue streams, any drop off in unit sales is far less dramatic than even just three years ago.

    Oh god, not you again with same old tired rhetoric, towing the Wall Scum line...
    watto_cobra
  • Reply 42 of 54

    I think Apple has been meaning to put an end to reporting unit sales for a while. Had they done that last year, then the analysts who predicted the X had flopped wouldn't have ended up with egg on their face.

    I'm sure Apple has factored in the fact that the stock price would fall when they announced it. It will pick up again when people get used to the new way of reporting.

    Heck, people have already forgotten about Bloomberg!

    watto_cobra
  • Reply 43 of 54
    avon b7avon b7 Posts: 3,761member
    avon b7 said:
    lkrupp said:
    lkrupp said:
    Apple stock down 20% in the last 3 months. I’m all for Apple no longer providing unit sales data but if they’re going to stop providing it they need to come up with better metrics and a more compelling narrative. Otherwise the narrative becomes Apple stopped providing this data because they’re not growing and they won’t be able to raise prices to offset the lack of unit growth forever. How about Apple provide information on active install base and average revenue per user?
    Until they once again report record revenue and profit. Then no one will care anymore. Once more the requirements for Apple are different than that of its competitors. Samsung and Google don't report unit sales and that’s okay. We have no idea how many Galaxy S9s Samsung are selling. Apple does the same thing and it’s hiding something. Android fans like to call Apple fans sheep and lemmings. The true sheep and lemmings are the herds of investors that panic at the drop of the hat and it's not only AAPL. Wait for it because somebody is going to start the death spiral clock on Apple any day now.
    The problem is Apple was providing this information and now is not. I don’t remember Samsung or Google ever providing it. If Apple is going to stop providing unit sales because it’s not meaningful then provide something that is meaningful.
    They’ll provide the same information as Samsung or Google, namely income and profit, eps, you know, the usual stuff that investors need and is required by the SEC. In a few months no one will care how many iPhones are being sold as long as the income and profit numbers are good. You think Apple doesn’t know that iPhone sales will eventually plateau? You think Apple doesn’t know that they have to diversify their business model? Why else would Apple be hell bent on services these days? It’s the tech blogs and analysts that still think Apple’s life depends on iPhone sales and that without that Apple goes away quickly.
    If we look at the data we have to hand we can already conclude that iPhones might have plateaued. Of course, that in turn might also be one of the reasons Apple has now decided to stop reporting unit sales. For all the blustering about past failed analysis and projections, there is also the chance that, this year, those projections could actually be right.

    It's important to not lose sight of that.

    As for Singles' Day, it is just that - one day - and in this piece, from one vendor (Alibaba) with seemingly nothing to support it save for one report from CNBC which provided no way to verify the information (at least the last time I checked) and when I went through Alibaba's post event press releases I could find no trace of the reference either. What is clear though is that all numbers were revenue numbers and not unit numbers. Hardly surprising news then and puts the terms 'outsold' and 'demand' into some context. One day has very little weight as a minute snapshot that cannot even be verified (as far aa I can tell).

    From an investment perspective, true investors probably know full well that iPhone unit shipments could dip at some point but as long as iPhone dependency is being reduced and is balanced out by other revenue streams, any drop off in unit sales is far less dramatic than even just three years ago.

    What’s most imortant to keep sight of is cause and effect.  The facts are that unit sales grew for the entire life of the iPhone with the exception of the post-iPhone 6 supercycle (the cause of which was much pent-up demand for larger displays in an iPhone).  This flattening off of unit sales is due to Apple raising ASPs with the last two cycles.  Apple’s increases in ASP are not the effect, but are the cause.  To apply an extreme mind experiment, do you think iPhone unit sales would have leveled off had Apple steadily lowered ASPs to the point where the ASP matched the approximate $200 of Samsung’s smartphone line-up?  I submit that in such case iPhone would virtually take over the market from Android.  You may conclude otherwise, but it’s a stretch in the opposite direction to imagine unit sales would have leveled off at any ASP, which is what is implied by analysts suggesting Apple’s price increases were a reaction to, and not the cause of, unit sales leveling off.
    I think there is more than just one factor at play. Price is clearly one of them. Saturation in the developed world is another as is Apple's very slow release cycle.

    During the 2017 refresh, Apple left us with its broadest spread ever on all aspects (price, screen sizes and storage) and while the price tag of the X may have raised eyebrows, it was no less true that there had never been quite so many options at so many price points. The only 'but' was that those phones sitting on lower price points were 'old' and the full screen nature of the X made even the then new 8 Series look dated. Apple now even pitches the look of the X series directly against its own 8 series phones on its website, reinforcing the 'dated' notion of anything that isn't full screen.

    With the move to three more X series phones, it has simply made the situation worse.

    In spite of those moves, sales remain flat with no signs of change in sight.
  • Reply 44 of 54
    avon b7avon b7 Posts: 3,761member
    avon b7 said:
    lkrupp said:
    lkrupp said:
    Apple stock down 20% in the last 3 months. I’m all for Apple no longer providing unit sales data but if they’re going to stop providing it they need to come up with better metrics and a more compelling narrative. Otherwise the narrative becomes Apple stopped providing this data because they’re not growing and they won’t be able to raise prices to offset the lack of unit growth forever. How about Apple provide information on active install base and average revenue per user?
    Until they once again report record revenue and profit. Then no one will care anymore. Once more the requirements for Apple are different than that of its competitors. Samsung and Google don't report unit sales and that’s okay. We have no idea how many Galaxy S9s Samsung are selling. Apple does the same thing and it’s hiding something. Android fans like to call Apple fans sheep and lemmings. The true sheep and lemmings are the herds of investors that panic at the drop of the hat and it's not only AAPL. Wait for it because somebody is going to start the death spiral clock on Apple any day now.
    The problem is Apple was providing this information and now is not. I don’t remember Samsung or Google ever providing it. If Apple is going to stop providing unit sales because it’s not meaningful then provide something that is meaningful.
    They’ll provide the same information as Samsung or Google, namely income and profit, eps, you know, the usual stuff that investors need and is required by the SEC. In a few months no one will care how many iPhones are being sold as long as the income and profit numbers are good. You think Apple doesn’t know that iPhone sales will eventually plateau? You think Apple doesn’t know that they have to diversify their business model? Why else would Apple be hell bent on services these days? It’s the tech blogs and analysts that still think Apple’s life depends on iPhone sales and that without that Apple goes away quickly.
    If we look at the data we have to hand we can already conclude that iPhones might have plateaued. Of course, that in turn might also be one of the reasons Apple has now decided to stop reporting unit sales. For all the blustering about past failed analysis and projections, there is also the chance that, this year, those projections could actually be right.

    It's important to not lose sight of that.

    As for Singles' Day, it is just that - one day - and in this piece, from one vendor (Alibaba) with seemingly nothing to support it save for one report from CNBC which provided no way to verify the information (at least the last time I checked) and when I went through Alibaba's post event press releases I could find no trace of the reference either. What is clear though is that all numbers were revenue numbers and not unit numbers. Hardly surprising news then and puts the terms 'outsold' and 'demand' into some context. One day has very little weight as a minute snapshot that cannot even be verified (as far aa I can tell).

    From an investment perspective, true investors probably know full well that iPhone unit shipments could dip at some point but as long as iPhone dependency is being reduced and is balanced out by other revenue streams, any drop off in unit sales is far less dramatic than even just three years ago.

    Oh god, not you again with same old tired rhetoric, towing the Wall Scum line...
    If you had been paying attention, you would have noticed that my comments on iPhone have always been on, erm, iPhone.

    My comments on Apple in a broader sense take into account ccompany-wide aspects such as its reducing dependency on iPhone as a revenue generator.

    How is that 'towing the Wall Scum line'?
    muthuk_vanalingam
  • Reply 45 of 54
    I’m not concerned about the stock price. Yes, I get an ulcer every time it goes for a dive as my life savings is essentially riding on Apple, but anyone who knows anything at all understands that AAPL is the most manipulated stock in the history of stocks. Irrational drops are just part of the ride. When I first bought AAPL in 2001, it almost immediately dropped 40%. Had I not been young and poor, I would have bought more. Instead I flew around the room in a panic. Fortunately I was patient enough to hang in there. I only wish I had as much as some of the rest of you on this forum. Apple is certainly in fine shape for many, many years to come. I remember when we had supposedly reached “Peak Apple” when the iPod had saturated the market and the iPhone had yet to be revealed to the world. Stock market analysts are dumbasses. 

    That said, I wouldn’t mind seeing less of Humanitarian Tim Cook and more of Tech Innovator Tim Cook. It chaps my hide that Apple has essentially ceded the smart home hardware market to Amazon (freaking Amazon!!!) and to a lesser extent Google, when there were whispers of Apple getting into home automation YEARS before Alexa was even wisp of an idea.

    Apple is spending BILLIONS in R&D and it certainly doesn’t cost that much to develop bezel-less iPads and $130 styli. When do we get to see the next great product line come out of Apple’s secret labs? Every time Tim & Co. drop a line in an interview about exciting new things in the works, I certainly never think they’re talking about Apple Watches with curved-corner displays.

    Apple simply needs to move with more urgency. The Chinese (thanks to free software development by our friends at Google) will continue to copy every innovation Apple comes up with and sell those innovations at bottom-dollar (née, bottom-yuan) to infinity and beyond. Apple can only stay ahead by expanding its product lines and strengthening its ecosystem (see: home automation again).

    And when will we finally see Apple take the gloves off and start marketing the message about Google’s dystopian business model? Most consumers are ignorant of the fact that Google (through its Asian knockoff partners) sells cheap hardware only to suck up personal data to sell to advertisers, killing American companies and innovation in the process. Apple is basically the last remaining American mobile device maker, thanks to Google, who’ll sell you out to the Chinese or Koreans without a single ounce of remorse. 
    Google with Android might actually be doing a service to Apple by copying the user experience as closely as it has over these last ten years.  Because android phones adapt the market to an iPhone-like experience.  As Tim says, Android is training ground for iOS.  As the middle class around the world expands, more and more people who aspire to own an iPhone can actually afford one.  
    Middle class outside the western world has less money. Chinese middle class families earn 10k to 40k per year. Not enough at todays iPhone prices. 
  • Reply 46 of 54
    avon b7avon b7 Posts: 3,761member
    I’m not concerned about the stock price. Yes, I get an ulcer every time it goes for a dive as my life savings is essentially riding on Apple, but anyone who knows anything at all understands that AAPL is the most manipulated stock in the history of stocks. Irrational drops are just part of the ride. When I first bought AAPL in 2001, it almost immediately dropped 40%. Had I not been young and poor, I would have bought more. Instead I flew around the room in a panic. Fortunately I was patient enough to hang in there. I only wish I had as much as some of the rest of you on this forum. Apple is certainly in fine shape for many, many years to come. I remember when we had supposedly reached “Peak Apple” when the iPod had saturated the market and the iPhone had yet to be revealed to the world. Stock market analysts are dumbasses. 

    That said, I wouldn’t mind seeing less of Humanitarian Tim Cook and more of Tech Innovator Tim Cook. It chaps my hide that Apple has essentially ceded the smart home hardware market to Amazon (freaking Amazon!!!) and to a lesser extent Google, when there were whispers of Apple getting into home automation YEARS before Alexa was even wisp of an idea.

    Apple is spending BILLIONS in R&D and it certainly doesn’t cost that much to develop bezel-less iPads and $130 styli. When do we get to see the next great product line come out of Apple’s secret labs? Every time Tim & Co. drop a line in an interview about exciting new things in the works, I certainly never think they’re talking about Apple Watches with curved-corner displays.

    Apple simply needs to move with more urgency. The Chinese (thanks to free software development by our friends at Google) will continue to copy every innovation Apple comes up with and sell those innovations at bottom-dollar (née, bottom-yuan) to infinity and beyond. Apple can only stay ahead by expanding its product lines and strengthening its ecosystem (see: home automation again).

    And when will we finally see Apple take the gloves off and start marketing the message about Google’s dystopian business model? Most consumers are ignorant of the fact that Google (through its Asian knockoff partners) sells cheap hardware only to suck up personal data to sell to advertisers, killing American companies and innovation in the process. Apple is basically the last remaining American mobile device maker, thanks to Google, who’ll sell you out to the Chinese or Koreans without a single ounce of remorse. 
    Google with Android might actually be doing a service to Apple by copying the user experience as closely as it has over these last ten years.  Because android phones adapt the market to an iPhone-like experience.  As Tim says, Android is training ground for iOS.  As the middle class around the world expands, more and more people who aspire to own an iPhone can actually afford one.  
    Middle class outside the western world has less money. Chinese middle class families earn 10k to 40k per year. Not enough at todays iPhone prices. 
    I will add that Huawei launched the Mate 20 Pro in India two days ago with pricing starting cheaper than the iPhone XR in India. Clearly, the premium market in India is seeing some price disruption of late.  
    muthuk_vanalingam
  • Reply 47 of 54
    Was this article written by the apple fan club president?? I am a lumentum (and finisar) shareholder and listened to the lumentum conference call on the order cut. They indeed still get about 30 percent of their business from Apple and were expecting a LOT more once the XR and XS were launched. How this article can just concentrate on lumentum but ignore similar warnings from austrian company AMS (also a apple 3d sensor supplier, see stock down massively), Qvoro, Skyworks etc. is beyond me. Are all these DIFFERENT suppliers lying?? Is it a big anti apple conspiracy?? Or did apple do what apple always does?? Get its suppliers to stuff the channel with inventory right up to the moment apple tells them "hey you know what, we dont need all the product you produced, cut back." Finisar will report its results next week. Analysts are not completely stupid and asked if Finisar was the reason for the order cut. The Finisar sherman texas factory that will produce VCSEL chips for apple is not expected to come fully on line until March. Per Lumentum its takes about 7 weeks from the time an order is received from apple until delivery. So if Finisar is not expected to get up and running fully for about 16 weeks (at the time of the notice from apple), there would be a supply gap of several weeks. Besides Lumentum there is little excess production that can be switched over. That was the reason apple approached finisar, to get more supply and more importantly, to keep competitors from that potential supply. Furthermore the much vaunted 390 million dollar investment in Finisar by apple is not actual cash. Per Finisar they specifically corrected news reports to say it is just pre orders from apple, not an actual investment. Finisar received NO money from apple. Furthermore Foxconn the assembler of Iphones for apple announced cut backs. Does this all sound like Iphone demand is booming?? Capiche??
    edited November 2018 avon b7
  • Reply 48 of 54
    melgrossmelgross Posts: 31,647member
    melgross said:

    “Apple has previously changed the way it reported its sales, combining portables and desktops into a single Mac category, suspending unit sales reporting for iPods, and introducing some new product categories without ever reporting how many sold, notably including Apple TV, Apple Watch, AirPods and HomePod. 

    “However, the lack of data from reduced unit reporting is clearly not aimed at hiding failure...”

    THIS!  Apple continued to grow in revenue, profits and importance to the markets in which it participates, and perhaps also in importance to society, through all those years while changing the way it reported information to investors.  There was a time when the market fretted about iPod unit sales actually falling off a cliff, and yet Apple grew as a business.  Same thing happened, for quite a few quarters in a row, to iPad unit sales.  Analysts and investors fretted, while Apple grew.

     I get that it’s difficult and uncomfortable seeing into the future.  but here we have a business know for innovation and focus and discipline, with a proven track record, and that business is looking out to the future and hinting that it’s going to be involved in two or three enormous markets.  Those being health care, streaming entertainment and transportation. Two of those offer the possibility to trump even the iPhone in terms of the size of the opportunity.  And Apple feels it has sufficient resources to pursue those opportunities while ramping up its stock repurchases to unprecedented levels; unprecedented for any company, ever.   If there’s any company I’d bet on, and I am, to disrupt and create new innovative offerings, I’d be hard-pressed to name any company other than Apple.  They really do seem to know what they’re doing, especially given they succeed in increasing revenue and profit by doing the opposite of what so many pundits and analysts think they should.  
    Since you’re comparing iPod sales with what’s happening now, I’d like to remind you that Apple replaced iPod sales with the much higher priced iPhone sales. What is Apple replacing anything with now?
    Future growth for Apple lies in whatever they're doing with respect to wearables (Watch / Glasses / AirPods) & Project Titan.
    That doesn’t say much. None of that can replace iPhone sales the way iPhone sales replaced iPod sales. And we have no idea as to what Apple is doing with Titan, so we can’t say anything about it.
  • Reply 49 of 54
    melgrossmelgross Posts: 31,647member

    melgross said:
    melgross said:
    I don’t agree with this. It was a mistake for Apple to do this. We really don’t know the reason for it, no matter what some people may be writing, as though they have special knowledge, which they don’t.

    but if this isn’t to just hide declining sales numbers across several product lines, which the investment and reporting community believes it is, as it has been for other companies, then this was the worst time to have done it. Right at the time where Apple gave disappointing guidance for their biggest quarter of the year, which we were in when the guidance was given, that has lead many to think that Apple did this because of the modest guidance, and a poor start for the first month of the quarter.

    if that isn’t true, then Apple should have done it before, when their sales were very robust, and growing well. Then it couldn’t have been thought of as an attempt to hide disappointment.

    as a customer, and a long term investor in Apple, I look forwards to the quarterly numbers. One reason is to see how they did when compared to the estimates given by those firms that earn their living from it. But now, Apple won’t be able to rebut their often inaccurate numbers, which, more often than not, are below the actual numbers.

    so yes, I’m disappointed in this, and I haven’t seen a logical and good reason for them doing it.
    I’m surprised by your reaction, Mel.  I’m down $500k from the top and I think you’re down $6 million, but the facts are different from your characterization. 

    A few of us for years have been hoping Apple would stop reporting unit sales, precisely to take the focus off them and for exactly the reason Apple indicated; because a unit of iPhone sales or Mac sales is less relavent to the business results than it used to be.  As painful as this transition is, that’s a fact.  Apple is diversifying with new products and services (Watch, AirPods, HomePod, Apple Music, etc) while also adjusting prices higher, to maintain gross margins and  to reflect higher R&D expenditures and the resulting more sophisticated technology it’s delivering to customers,  

    You suggest this is the worst time to make this change and then suggest the best time would have been when sales were very robust.  Mel, sales were VERY robust the last four quarters, so Apple made the change exactly as you would have wanted.  Plus, the forecast for this quarter is some $7-9 billion above last year’s holiday quarter, so again, Apple is taking the focus off unit sales just at the time you’d like them to, it seems.  At a time when sales are robust and forecasts are projecting additional growth in sales.  I fail to see the disconnect between what you think would be the ideal timing and the actual context within which Apple announced the change.  

    As to Apple not being able to rebut the often inaccurate unit sales estimates, don’t you see that it will become futile to even make such estimates in the future, at least none that anyone will bother listening to, for the very fact that there will be no actual unit sales numbers reported by Apple to which the estimates can eventually be compared.  Analysts pushing unit sales numbers will increasing feel foolish shouting into a vacuum.  
    I can’t agree. iPhones are still about 60% of sales. Macs and iPads together are about 20% I believe. Other sales of goods are another 10%, or so. Most of the rest is services at about 17%. So, no matter how you look at the numbers, physical sales of hardware is the vast part of Apple still. Those do t add up because I’m not looking up the actual numbers.

    i don’t agree that sales are robust. They’re ok. But ok isn’t what drives the market or the stock. If, several years ago, when the 6 series came out, and sales went up by 49% that year, Apple could have done this with no downside. But now, with questions all around, it’s a bad time.

    i’m not selling my stock. In fact I just told my wife, who sold her parents home recently, to buy Apple stock now, and not worry if it goes lower, because I have long term confidence that this will sort out. But, overall, this lack of transparency will hold things back. People I talk to in the financial community believe that the stock dived 20 points because of this alone, and that it’s hindering an attempt to come back.

    one thing the financial community liked about Apple was that while they weren’t willing to answer the usual questions about non existent product possibilities, and wouldn’t give guidance beyond the next quarter, they did give a fairly decent amount of information about sales. Sussful companies have little to fear about giving that information, while companies that aren’t doing well hoard that information.

    those that give sales estimates based on sometimes dubious sources will continue to do so. The problem is that now those estimates can’t be counterbalanced by actual numbers from Apple. Is Samsung really selling as many phones as estimated? We don’t know. Same thing with others. And now we won’t know how many Apple is selling either. It will be easier for companies such as Gardner and IDG to come up with numbers that remain unchallenged. That’s not a good thing. Apple used to be known as an island of stability, now they’re not. Now, every rumor will have more weight.
    With as much stock as you and I have we should have graduated from the mindset of the typical market participant to be more aligned with, for example, Warren Buffett.  The typical market participant, even one who fancies himself an investor rather than a trader, worries daily about his portfolio worth.  But a Buffett, or a RadarTheKat, and I’d hope to include you, thinks differently.  Buffett would tell us the only two times a stock price matters is on the day you buy and the day you sell.  You just said you aren’t selling, because you trust the long future of Apple, and you further stated you’re advising family members to get in on this big downdraft.  You clearly see this as the buying opportunity it is, and likely so does Buffett and Apple management.  So having the analysts get things wrong on occasion provides long-term benefits to all the right market participants, and adversely effects only short-term players.  It also benefits some short-term players, but why should we care who’s pockets money we don’t own falls into.  Let the shorts buy Ferrari’s; that doesn’t really change my life, as long as the businesses I’m invested in remain sound and continue to allocate capital and profits appropriately (including R&D investments, buybacks and dividends).
    We often remark that Apple’s P/E is too low in comarison to comparable companies, and it’s true. Apple being a very consumer facing company a]selli g a relatively high priced product isn’t trusted to have a clearly defined path to the future. We saw that during the Bush recession. But when times are better, the stock tends to shoot up faster than the market overall. So I’m not worried about the longe term.

    but, everything that can hold the stock back will. Removing that extra layer of transparency will retard the rise of the stock. Will it get there? Yes, but it could take much longer. We were hitting a 20 P/E, which is pretty high for Apple. This will just have it take longer to get back there, if it ever does. The question therefore, is will there be better investments to make? Some may be, but at this time of my life, I appreciate the dividend, though really, that’s too low. It could be that (shudder) Microsoft is a better investment.
  • Reply 50 of 54
    melgrossmelgross Posts: 31,647member
    melgross said:

    “Apple has previously changed the way it reported its sales, combining portables and desktops into a single Mac category, suspending unit sales reporting for iPods, and introducing some new product categories without ever reporting how many sold, notably including Apple TV, Apple Watch, AirPods and HomePod. 

    “However, the lack of data from reduced unit reporting is clearly not aimed at hiding failure...”

    THIS!  Apple continued to grow in revenue, profits and importance to the markets in which it participates, and perhaps also in importance to society, through all those years while changing the way it reported information to investors.  There was a time when the market fretted about iPod unit sales actually falling off a cliff, and yet Apple grew as a business.  Same thing happened, for quite a few quarters in a row, to iPad unit sales.  Analysts and investors fretted, while Apple grew.

     I get that it’s difficult and uncomfortable seeing into the future.  but here we have a business know for innovation and focus and discipline, with a proven track record, and that business is looking out to the future and hinting that it’s going to be involved in two or three enormous markets.  Those being health care, streaming entertainment and transportation. Two of those offer the possibility to trump even the iPhone in terms of the size of the opportunity.  And Apple feels it has sufficient resources to pursue those opportunities while ramping up its stock repurchases to unprecedented levels; unprecedented for any company, ever.   If there’s any company I’d bet on, and I am, to disrupt and create new innovative offerings, I’d be hard-pressed to name any company other than Apple.  They really do seem to know what they’re doing, especially given they succeed in increasing revenue and profit by doing the opposite of what so many pundits and analysts think they should.  
    Since you’re comparing iPod sales with what’s happening now, I’d like to remind you that Apple replaced iPod sales with the much higher priced iPhone sales. What is Apple replacing anything with now?
    I’m not sure analysts were predicting, back in 2008, that the iPhone would be the success it came to be, or even in 2009 or 2010.  In fact, I recall a huge downdraft in the stock amidst dire predictions of Apple’s pending doom beginning Sept 21, 2012, immediately following the introduction of the iPhone 5, which analysts said wasn’t enough of an increase in screen size compared to what the competition had on offer.  Apple responded with the 5S, no larger than the 5 but with the world’s first 64-bit processor in a smartphone.  Seems like that particular leap ahead of the competition has played out very well for Apple, as Apple was just one year later able to begin matching the larger display sizes of Samsung and others, while six years later the competition still has not trumped the iPhone’s superior performance, even as they throw more RAM at the problem and use larger batteries and attempt to cheat benchmarks.  Apple knew what was most important, yet much more difficult to do (the leap to 64-bit in this case) and what was relatively easy to accomplish (increasing display size).  I trust Apple knows how to chart its future course in areas that might yield new revenue streams that may even top the iPhone.  Over the next decade transportation and health care are both ripe for disruption and Apple is looking hard for its unique value-add in both.  And each represents an enormous market potential.  
    I don’t think it’s that simple these days. Back then, a phone was a fairly obvious product for Apple. Mobile was really coming into its own, but the smartphone market was dominated by players with simple real-time OSs. They couldn’t do all that much. That’s why Apple product revolutionized the business. Dislike the initial skepticism, product sales continued to rise steadily. 

    But it what does Apple have today that can challenge a product that still compromises 60% of their sales? Sales which are enormous. None of the newer products will make the cut. Even services are still a small part of the sales. If Apple doesn’t at least maintain phone sales, the increase to services will shrink, making that less important as well.

    i feel that Apple needs to stop relying on price increases to maintain dollar sales and profits. If too many get turned off by over $1,000 phones, Apple will see diminishing sales. They discontinued what is thought as a popular phone, the SE, when instead, they should have kept it current, and continues]d to sell it at a $400 price. How are they going to get all of these sales in India they so interested in as a balance to China, if they don’t have something to sell people that they can afford? Same thing for S America, other areas in Asia, the Mid East, Africa, etc.? They have nothing. And it can’t be said that it doesn’t matter, because in their other big markets, phone sales are rapidly becoming saturated, and we’re seeing flat to slightly declining sales in all phone categories.

    so marketshare now does become important, as sales need to be clawed from others, instead of seeing them from a growing market.

    by hiding the numbers, it doesn’t give people confidence that that will happen.
  • Reply 51 of 54
    melgross said:

    melgross said:
    melgross said:
    I don’t agree with this. It was a mistake for Apple to do this. We really don’t know the reason for it, no matter what some people may be writing, as though they have special knowledge, which they don’t.

    but if this isn’t to just hide declining sales numbers across several product lines, which the investment and reporting community believes it is, as it has been for other companies, then this was the worst time to have done it. Right at the time where Apple gave disappointing guidance for their biggest quarter of the year, which we were in when the guidance was given, that has lead many to think that Apple did this because of the modest guidance, and a poor start for the first month of the quarter.

    if that isn’t true, then Apple should have done it before, when their sales were very robust, and growing well. Then it couldn’t have been thought of as an attempt to hide disappointment.

    as a customer, and a long term investor in Apple, I look forwards to the quarterly numbers. One reason is to see how they did when compared to the estimates given by those firms that earn their living from it. But now, Apple won’t be able to rebut their often inaccurate numbers, which, more often than not, are below the actual numbers.

    so yes, I’m disappointed in this, and I haven’t seen a logical and good reason for them doing it.
    I’m surprised by your reaction, Mel.  I’m down $500k from the top and I think you’re down $6 million, but the facts are different from your characterization. 

    A few of us for years have been hoping Apple would stop reporting unit sales, precisely to take the focus off them and for exactly the reason Apple indicated; because a unit of iPhone sales or Mac sales is less relavent to the business results than it used to be.  As painful as this transition is, that’s a fact.  Apple is diversifying with new products and services (Watch, AirPods, HomePod, Apple Music, etc) while also adjusting prices higher, to maintain gross margins and  to reflect higher R&D expenditures and the resulting more sophisticated technology it’s delivering to customers,  

    You suggest this is the worst time to make this change and then suggest the best time would have been when sales were very robust.  Mel, sales were VERY robust the last four quarters, so Apple made the change exactly as you would have wanted.  Plus, the forecast for this quarter is some $7-9 billion above last year’s holiday quarter, so again, Apple is taking the focus off unit sales just at the time you’d like them to, it seems.  At a time when sales are robust and forecasts are projecting additional growth in sales.  I fail to see the disconnect between what you think would be the ideal timing and the actual context within which Apple announced the change.  

    As to Apple not being able to rebut the often inaccurate unit sales estimates, don’t you see that it will become futile to even make such estimates in the future, at least none that anyone will bother listening to, for the very fact that there will be no actual unit sales numbers reported by Apple to which the estimates can eventually be compared.  Analysts pushing unit sales numbers will increasing feel foolish shouting into a vacuum.  
    I can’t agree. iPhones are still about 60% of sales. Macs and iPads together are about 20% I believe. Other sales of goods are another 10%, or so. Most of the rest is services at about 17%. So, no matter how you look at the numbers, physical sales of hardware is the vast part of Apple still. Those do t add up because I’m not looking up the actual numbers.

    i don’t agree that sales are robust. They’re ok. But ok isn’t what drives the market or the stock. If, several years ago, when the 6 series came out, and sales went up by 49% that year, Apple could have done this with no downside. But now, with questions all around, it’s a bad time.

    i’m not selling my stock. In fact I just told my wife, who sold her parents home recently, to buy Apple stock now, and not worry if it goes lower, because I have long term confidence that this will sort out. But, overall, this lack of transparency will hold things back. People I talk to in the financial community believe that the stock dived 20 points because of this alone, and that it’s hindering an attempt to come back.

    one thing the financial community liked about Apple was that while they weren’t willing to answer the usual questions about non existent product possibilities, and wouldn’t give guidance beyond the next quarter, they did give a fairly decent amount of information about sales. Sussful companies have little to fear about giving that information, while companies that aren’t doing well hoard that information.

    those that give sales estimates based on sometimes dubious sources will continue to do so. The problem is that now those estimates can’t be counterbalanced by actual numbers from Apple. Is Samsung really selling as many phones as estimated? We don’t know. Same thing with others. And now we won’t know how many Apple is selling either. It will be easier for companies such as Gardner and IDG to come up with numbers that remain unchallenged. That’s not a good thing. Apple used to be known as an island of stability, now they’re not. Now, every rumor will have more weight.
    With as much stock as you and I have we should have graduated from the mindset of the typical market participant to be more aligned with, for example, Warren Buffett.  The typical market participant, even one who fancies himself an investor rather than a trader, worries daily about his portfolio worth.  But a Buffett, or a RadarTheKat, and I’d hope to include you, thinks differently.  Buffett would tell us the only two times a stock price matters is on the day you buy and the day you sell.  You just said you aren’t selling, because you trust the long future of Apple, and you further stated you’re advising family members to get in on this big downdraft.  You clearly see this as the buying opportunity it is, and likely so does Buffett and Apple management.  So having the analysts get things wrong on occasion provides long-term benefits to all the right market participants, and adversely effects only short-term players.  It also benefits some short-term players, but why should we care who’s pockets money we don’t own falls into.  Let the shorts buy Ferrari’s; that doesn’t really change my life, as long as the businesses I’m invested in remain sound and continue to allocate capital and profits appropriately (including R&D investments, buybacks and dividends).
    We often remark that Apple’s P/E is too low in comarison to comparable companies, and it’s true. Apple being a very consumer facing company a]selli g a relatively high priced product isn’t trusted to have a clearly defined path to the future. We saw that during the Bush recession. But when times are better, the stock tends to shoot up faster than the market overall. So I’m not worried about the longe term.

    but, everything that can hold the stock back will. Removing that extra layer of transparency will retard the rise of the stock. Will it get there? Yes, but it could take much longer. We were hitting a 20 P/E, which is pretty high for Apple. This will just have it take longer to get back there, if it ever does. The question therefore, is will there be better investments to make? Some may be, but at this time of my life, I appreciate the dividend, though really, that’s too low. It could be that (shudder) Microsoft is a better investment.
    Apple wants to get away from the perception it is an "equipment" supplier and more of a provider of services who just happens to sell the equipment you need to get those services. I have been a stock investor for more than 25 years now. Less transparency is not a good thing. Back in early 2016 I had to (figuratively) talk a couple relatives off the ledge when apple stock took about a 29 percent decline from top (about 130) to bottom (about 90). That was when the sales data revealed people were not buying the 6S refresh, and like now, preferred the older cheaper phones like the 4 and 5. Coincidentally a 29 percent drop this time would bring apple down to about 165, a level I think it can still hit (and where I would be a buyer). This time I think apple some how thought it could kind of hide the fact its products are actually cyclical and that it had reached the top of its price point. If apple is no longer going to give sales data then investors have no choice but to put more weight on what is reported by suppliers. Apple might want to be seen as a service provider with a big install base, but its service business is still a function of how many Iphones are out there. Less transparency is not seen as a good thing by the investment community. Apple knows that.
    edited November 2018
  • Reply 52 of 54
    Was this article written by the apple fan club president?? I am a lumentum (and finisar) shareholder and listened to the lumentum conference call on the order cut. They indeed still get about 30 percent of their business from Apple and were expecting a LOT more once the XR and XS were launched. How this article can just concentrate on lumentum but ignore similar warnings from austrian company AMS (also a apple 3d sensor supplier, see stock down massively), Qvoro, Skyworks etc. is beyond me. Are all these DIFFERENT suppliers lying?? Is it a big anti apple conspiracy?? Or did apple do what apple always does?? Get its suppliers to stuff the channel with inventory right up to the moment apple tells them "hey you know what, we dont need all the product you produced, cut back." Finisar will report its results next week. Analysts are not completely stupid and asked if Finisar was the reason for the order cut. The Finisar sherman texas factory that will produce VCSEL chips for apple is not expected to come fully on line until March. Per Lumentum its takes about 7 weeks from the time an order is received from apple until delivery. So if Finisar is not expected to get up and running fully for about 16 weeks (at the time of the notice from apple), there would be a supply gap of several weeks. Besides Lumentum there is little excess production that can be switched over. That was the reason apple approached finisar, to get more supply and more importantly, to keep competitors from that potential supply. Furthermore the much vaunted 390 million dollar investment in Finisar by apple is not actual cash. Per Finisar they specifically corrected news reports to say it is just pre orders from apple, not an actual investment. Finisar received NO money from apple. Furthermore Foxconn the assembler of Iphones for apple announced cut backs. Does this all sound like Iphone demand is booming?? Capiche??
    No offense, but this happens every year. Apple wanted to be able to meet supply to meet the initial rush, which was less due to this being an S cycle. Apple May have overprojected sales but there are a boat load of reasons they backed off, including a drastically cooling economy in the US.
    watto_cobra
  • Reply 53 of 54
    Was this article written by the apple fan club president?? I am a lumentum (and finisar) shareholder and listened to the lumentum conference call on the order cut. They indeed still get about 30 percent of their business from Apple and were expecting a LOT more once the XR and XS were launched. How this article can just concentrate on lumentum but ignore similar warnings from austrian company AMS (also a apple 3d sensor supplier, see stock down massively), Qvoro, Skyworks etc. is beyond me. Are all these DIFFERENT suppliers lying?? Is it a big anti apple conspiracy?? Or did apple do what apple always does?? Get its suppliers to stuff the channel with inventory right up to the moment apple tells them "hey you know what, we dont need all the product you produced, cut back." Finisar will report its results next week. Analysts are not completely stupid and asked if Finisar was the reason for the order cut. The Finisar sherman texas factory that will produce VCSEL chips for apple is not expected to come fully on line until March. Per Lumentum its takes about 7 weeks from the time an order is received from apple until delivery. So if Finisar is not expected to get up and running fully for about 16 weeks (at the time of the notice from apple), there would be a supply gap of several weeks. Besides Lumentum there is little excess production that can be switched over. That was the reason apple approached finisar, to get more supply and more importantly, to keep competitors from that potential supply. Furthermore the much vaunted 390 million dollar investment in Finisar by apple is not actual cash. Per Finisar they specifically corrected news reports to say it is just pre orders from apple, not an actual investment. Finisar received NO money from apple. Furthermore Foxconn the assembler of Iphones for apple announced cut backs. Does this all sound like Iphone demand is booming?? Capiche??
    No offense, but this happens every year. Apple wanted to be able to meet supply to meet the initial rush, which was less due to this being an S cycle. Apple May have overprojected sales but there are a boat load of reasons they backed off, including a drastically cooling economy in the US.
    Offense to what?? Yes apple wants parts to get the phones on the shelves so to speak. It pressures suppliers and then when the demand isnt there shuts off the spigot. The article makes it sound as though all these supplier reports are wrong.  Demand is wonderful. As I said the iphone is actually quite cyclical and just as the cycle ended in early 2016, here we are again. 
  • Reply 54 of 54
    melgrossmelgross Posts: 31,647member
    melgross said:

    melgross said:
    melgross said:
    I don’t agree with this. It was a mistake for Apple to do this. We really don’t know the reason for it, no matter what some people may be writing, as though they have special knowledge, which they don’t.

    but if this isn’t to just hide declining sales numbers across several product lines, which the investment and reporting community believes it is, as it has been for other companies, then this was the worst time to have done it. Right at the time where Apple gave disappointing guidance for their biggest quarter of the year, which we were in when the guidance was given, that has lead many to think that Apple did this because of the modest guidance, and a poor start for the first month of the quarter.

    if that isn’t true, then Apple should have done it before, when their sales were very robust, and growing well. Then it couldn’t have been thought of as an attempt to hide disappointment.

    as a customer, and a long term investor in Apple, I look forwards to the quarterly numbers. One reason is to see how they did when compared to the estimates given by those firms that earn their living from it. But now, Apple won’t be able to rebut their often inaccurate numbers, which, more often than not, are below the actual numbers.

    so yes, I’m disappointed in this, and I haven’t seen a logical and good reason for them doing it.
    I’m surprised by your reaction, Mel.  I’m down $500k from the top and I think you’re down $6 million, but the facts are different from your characterization. 

    A few of us for years have been hoping Apple would stop reporting unit sales, precisely to take the focus off them and for exactly the reason Apple indicated; because a unit of iPhone sales or Mac sales is less relavent to the business results than it used to be.  As painful as this transition is, that’s a fact.  Apple is diversifying with new products and services (Watch, AirPods, HomePod, Apple Music, etc) while also adjusting prices higher, to maintain gross margins and  to reflect higher R&D expenditures and the resulting more sophisticated technology it’s delivering to customers,  

    You suggest this is the worst time to make this change and then suggest the best time would have been when sales were very robust.  Mel, sales were VERY robust the last four quarters, so Apple made the change exactly as you would have wanted.  Plus, the forecast for this quarter is some $7-9 billion above last year’s holiday quarter, so again, Apple is taking the focus off unit sales just at the time you’d like them to, it seems.  At a time when sales are robust and forecasts are projecting additional growth in sales.  I fail to see the disconnect between what you think would be the ideal timing and the actual context within which Apple announced the change.  

    As to Apple not being able to rebut the often inaccurate unit sales estimates, don’t you see that it will become futile to even make such estimates in the future, at least none that anyone will bother listening to, for the very fact that there will be no actual unit sales numbers reported by Apple to which the estimates can eventually be compared.  Analysts pushing unit sales numbers will increasing feel foolish shouting into a vacuum.  
    I can’t agree. iPhones are still about 60% of sales. Macs and iPads together are about 20% I believe. Other sales of goods are another 10%, or so. Most of the rest is services at about 17%. So, no matter how you look at the numbers, physical sales of hardware is the vast part of Apple still. Those do t add up because I’m not looking up the actual numbers.

    i don’t agree that sales are robust. They’re ok. But ok isn’t what drives the market or the stock. If, several years ago, when the 6 series came out, and sales went up by 49% that year, Apple could have done this with no downside. But now, with questions all around, it’s a bad time.

    i’m not selling my stock. In fact I just told my wife, who sold her parents home recently, to buy Apple stock now, and not worry if it goes lower, because I have long term confidence that this will sort out. But, overall, this lack of transparency will hold things back. People I talk to in the financial community believe that the stock dived 20 points because of this alone, and that it’s hindering an attempt to come back.

    one thing the financial community liked about Apple was that while they weren’t willing to answer the usual questions about non existent product possibilities, and wouldn’t give guidance beyond the next quarter, they did give a fairly decent amount of information about sales. Sussful companies have little to fear about giving that information, while companies that aren’t doing well hoard that information.

    those that give sales estimates based on sometimes dubious sources will continue to do so. The problem is that now those estimates can’t be counterbalanced by actual numbers from Apple. Is Samsung really selling as many phones as estimated? We don’t know. Same thing with others. And now we won’t know how many Apple is selling either. It will be easier for companies such as Gardner and IDG to come up with numbers that remain unchallenged. That’s not a good thing. Apple used to be known as an island of stability, now they’re not. Now, every rumor will have more weight.
    With as much stock as you and I have we should have graduated from the mindset of the typical market participant to be more aligned with, for example, Warren Buffett.  The typical market participant, even one who fancies himself an investor rather than a trader, worries daily about his portfolio worth.  But a Buffett, or a RadarTheKat, and I’d hope to include you, thinks differently.  Buffett would tell us the only two times a stock price matters is on the day you buy and the day you sell.  You just said you aren’t selling, because you trust the long future of Apple, and you further stated you’re advising family members to get in on this big downdraft.  You clearly see this as the buying opportunity it is, and likely so does Buffett and Apple management.  So having the analysts get things wrong on occasion provides long-term benefits to all the right market participants, and adversely effects only short-term players.  It also benefits some short-term players, but why should we care who’s pockets money we don’t own falls into.  Let the shorts buy Ferrari’s; that doesn’t really change my life, as long as the businesses I’m invested in remain sound and continue to allocate capital and profits appropriately (including R&D investments, buybacks and dividends).
    We often remark that Apple’s P/E is too low in comarison to comparable companies, and it’s true. Apple being a very consumer facing company a]selli g a relatively high priced product isn’t trusted to have a clearly defined path to the future. We saw that during the Bush recession. But when times are better, the stock tends to shoot up faster than the market overall. So I’m not worried about the longe term.

    but, everything that can hold the stock back will. Removing that extra layer of transparency will retard the rise of the stock. Will it get there? Yes, but it could take much longer. We were hitting a 20 P/E, which is pretty high for Apple. This will just have it take longer to get back there, if it ever does. The question therefore, is will there be better investments to make? Some may be, but at this time of my life, I appreciate the dividend, though really, that’s too low. It could be that (shudder) Microsoft is a better investment.
    Apple wants to get away from the perception it is an "equipment" supplier and more of a provider of services who just happens to sell the equipment you need to get those services. I have been a stock investor for more than 25 years now. Less transparency is not a good thing. Back in early 2016 I had to (figuratively) talk a couple relatives off the ledge when apple stock took about a 29 percent decline from top (about 130) to bottom (about 90). That was when the sales data revealed people were not buying the 6S refresh, and like now, preferred the older cheaper phones like the 4 and 5. Coincidentally a 29 percent drop this time would bring apple down to about 165, a level I think it can still hit (and where I would be a buyer). This time I think apple some how thought it could kind of hide the fact its products are actually cyclical and that it had reached the top of its price point. If apple is no longer going to give sales data then investors have no choice but to put more weight on what is reported by suppliers. Apple might want to be seen as a service provider with a big install base, but its service business is still a function of how many Iphones are out there. Less transparency is not seen as a good thing by the investment community. Apple knows that.
    Apple is looking to increase services to $50 billion a year by 2020. That sounds great, until you realize that Apple did $260 billion in their last financial year ending the first of October. Hopefully, ending the 2019 financial year, Apple will be close to $300 billion. So having services more than a fairly small fraction of that is not going to happen. Hardware sales will remain the force behind Apple’s success for quite some time.

    if those hardware sales stumble, then so will services. It’s not that difficult to unserstand.
    edited November 2018
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