The common denominator is $'s. That is how financial success is measured. If Apple is knocking the ball out of the park a home run is a home run. Historically, Apple has evolved so many times, it might best to not tell the competition what is going to happen - no heads up for them. The products will evolve again soon and there will be a different series of products that are successful. A Mac with the ability to run Apps in a window will soon come to be - products will evolve and that is it.
The single most important thing Apple is doing right now is standardizing on Metal graphics. If you want to know what they are doing, you must follow this thread.
The single most important thing Apple is doing right now is standardizing on Metal graphics. If you want to know what they are doing, you must follow this thread.
Why is that the single most important thing, as opposed to standardizing on APFS?
Were you all writing these editorials when Apple was still providing quarterly unit sales data and putting out weekend launch press releases?
What a stupid question. Why would anyone be writing that about this w/ regards to Apple then, it wasn't necessary as it wasn't a topic yet. Now it's a topic by the haters, pundits, and concern trolls....thus the article is written now, after the decision. Not before it was ever made.
It was interesting to see which of your tentpoles would rise higher -- irrational hatred/criticism for DED pieces, vs disliking the disclosure of unit sales not done by the rest of the industry.
I changed the product mix graph to represent a 30:1 increase in revenue as stated in the article...
That's exactly what I thought they should have done with the graphic in the first place. Showing relative percentages is interesting , but showing the total revenue paints a more complete picture.
Nice article. Pity there wasn't a real classic DED quote in it, like "The incredible sewage pipe of analysts and supposed journalists working together to fire out a torrent of turbid slop in Apple's direction is quite incredible in the shameless nature of its purely false stink."
It's a matter of time that's all. In a few years after Apple continues to perform and report as most other companies do the moaners saying it is a 'disservice' will have moved on to some other trivial anti-Apple moan.
Funny observation about all these Apple pundits...If they really knew as much as they think they do, they would be running a company as successful as Apple. But, as been demonstrated repeatedly, they are usually clueless. They like to write about Apple because they get a lot of clicks. Seldom does anyone hold their feet to the fire when looking back at how wrong their stories were. Nice article.
Agreed. I still get a chuckle from the document our broker insisted we sign washing his hands of blame when nearly 15 years ago we told him to move the vast majority of the money into AAPL. On his absolute instance, we left a block in his hands. We outperformed his block by something like >1600% I think last time I checked.
The common denominator is $'s. That is how financial success is measured. If Apple is knocking the ball out of the park a home run is a home run. Historically, Apple has evolved so many times, it might best to not tell the competition what is going to happen - no heads up for them. The products will evolve again soon and there will be a different series of products that are successful. A Mac with the ability to run Apps in a window will soon come to be - products will evolve and that is it.
Agreed.
Hey, not even a window in that sense, check out the Stock App now, it's a seamless integration of an iOS app in Mojave. I can't wait for more useful apps like that that don't require a web browser.
Thanks for a surprisingly complete and in depth analysis. I'd assumed that Apple was doing this to hide declining iPhone sales, as most phone manufacturers are not increasing annual sales (or not increasing much). This does a lot for your cred, too.
Had Apple decided to do this 2 years ago, you would be making valid points -- but since this happens on the heels of declining unit sales of premium products, a trend that started with the release of the iPhone X, and Apple doubling down on their miscalculations with this year's line up (with even worse premium sales), this is Apple being in full-on Damage Control mode.
- Joswiak's interview with him stating that the iPhone XR has been consistently outperforming iPhone XS and XS Max sales, is being reported variously as "iPhone XR is best selling iPhone!", when that's not what he said. It really means that the iPhone XR is selling better than the two insanely over-priced iPhone XS and XS Max models, both of which aren't selling as well as they should. These are the sort of interviews that are being released as Damage Control media releases.
- Carriers confirming that they are seeing higher than average return rates on the X-style iPhones, with some stores reporting return rates to be amongst the highest return rates they have seen. Obviously, Apple wouldn't be reporting on this, now would they?
- Luca Maestri announcing how Apple will no longer report unit sales, giving some convoluted PR-sounding reason. Apple has always reported unit numbers WHEN IT BENEFITTED THEM, and not done so, when the numbers would have been inconvenient. This is what happened when the Apple Watch was originally released, remember? Again, Damage Control.
As we know, it's nothing new for Apple to deny, deny, deny -- we have seen this several times in the past (Antennagate, for example) and then quietly release fixes. Thus, the Damage Control we are witnessing should come as no surprise.
Likewise, and as usual, the various pundit blogs and websites engage in the usual acrobatics in their effort to keep pretending there is nothing wrong. I usually expect this from John Gruber, who would never admit that Apple does anything wrong, but am surprised to see a similar sort of Stockholm Syndrome surface in Daniel Eran Dilger's writing (especially considering the animosity between the two).
There will come a point when we have to admit that the Emperor Has No Clothes -- and the sooner this happens, the better for everyone. Internally, Apple is well aware that they are in trouble, and Apple is counting on their loyal acolytes to *want* to believe that nothing is wrong, so they can fix it.
Unfortunately, a real fix is still 2 years away -- because it will take another year for Apple to continue their mistake, until their sales slump becomes too obvious, before they will change course - which will take another year.
Had Apple decided to do this 2 years ago, you would be making valid points -- but since this happens on the heels of declining unit sales of premium products, a trend that started with the release of the iPhone X, and Apple doubling down on their miscalculations with this year's line up (with even worse premium sales), this is Apple being in full-on Damage Control mode.
- Joswiak's interview with him stating that the iPhone XR has been consistently outperforming iPhone XS and XS Max sales, is being reported variously as "iPhone XR is best selling iPhone!", when that's not what he said. It really means that the iPhone XR is selling better than the two insanely over-priced iPhone XS and XS Max models, both of which aren't selling as well as they should. These are the sort of interviews that are being released as Damage Control media releases.
- Carriers confirming that they are seeing higher than average return rates on the X-style iPhones, with some stores reporting return rates to be amongst the highest return rates they have seen. Obviously, Apple wouldn't be reporting on this, now would they?
- Luca Maestri announcing how Apple will no longer report unit sales, giving some convoluted PR-sounding reason. Apple has always reported unit numbers WHEN IT BENEFITTED THEM, and not done so, when the numbers would have been inconvenient. This is what happened when the Apple Watch was originally released, remember? Again, Damage Control.
As we know, it's nothing new for Apple to deny, deny, deny -- we have seen this several times in the past (Antennagate, for example) and then quietly release fixes. Thus, the Damage Control we are witnessing should come as no surprise.
Likewise, and as usual, the various pundit blogs and websites engage in the usual acrobatics in their effort to keep pretending there is nothing wrong. I usually expect this from John Gruber, who would never admit that Apple does anything wrong, but am surprised to see a similar sort of Stockholm Syndrome surface in Daniel Eran Dilger's writing (especially considering the animosity between the two).
There will come a point when we have to admit that the Emperor Has No Clothes -- and the sooner this happens, the better for everyone. Internally, Apple is well aware that they are in trouble, and Apple is counting on their loyal acolytes to *want* to believe that nothing is wrong, so they can fix it.
Unfortunately, a real fix is still 2 years away -- because it will take another year for Apple to continue their mistake, until their sales slump becomes too obvious, before they will change course - which will take another year.
Go ahead, fanboys - fire away. I'm expecting it.
"Carriers confirming that they are seeing higher than average return rates on the X-style iPhones, with some stores reporting return rates to be amongst the highest return rates they have seen. Obviously, Apple wouldn't be reporting on this, now would they? "
"Internally, Apple is well aware that they are in trouble"
Well written piece DED, except... For the dirst time ever I have held off on upgrading across the range of Apple devices (and with a family with four kids, that’s a lot of devices). That is, pure and simple, lost revenue for Apple. Macs, ipads, and iphones!
Why? Unlike Apple’s reporting, it’s simple. Pricing. While I suffer from the ‘far far away’ tax living in Australia, the real issue is Apple’s incessant raising of prices: on everything!
I was ready to upgrade all of my kids Mac minis this year. I was excited when the rumours pointed it to the upgrade. Then the pricing was announced. You must be joking. People were talking of the performance increase being worth it. Really. If I waited 5years I would expect to get at least the increase Apple announced; and not pay a 50+% premium for it.
My wife was going to buy a new iPhone XS. Then the new pricing came out. My wife is going to stay with her 6s for another year now. After all, she can literally buy a new MacBook for the price.
Apple has a problem in my opinion. The problem is an old one. Greed: and that will affect them if they don’t address it.
I have no problem with companies making healthy profits, and as an Apple shareholder I appreciate it. But the profit margins Apple are pushing are simply getting ridiculous. At some stage those margins effect the good will of consumers and that has long term consequences. In my case it means Apple is losing at least one year in deferred sales.
Apple would do well to remember the 10:1 rule. Negative sentiment is a powerful thing.
Well written piece DED, except... For the dirst time ever I have held off on upgrading across the range of Apple devices (and with a family with four kids, that’s a lot of devices). That is, pure and simple, lost revenue for Apple. Macs, ipads, and iphones!
Why? Unlike Apple’s reporting, it’s simple. Pricing. While I suffer from the ‘far far away’ tax living in Australia, the real issue is Apple’s incessant raising of prices: on everything!
I was ready to upgrade all of my kids Mac minis this year. I was excited when the rumours pointed it to the upgrade. Then the pricing was announced. You must be joking. People were talking of the performance increase being worth it. Really. If I waited 5years I would expect to get at least the increase Apple announced; and not pay a 50+% premium for it.
My wife was going to buy a new iPhone XS. Then the new pricing came out. My wife is going to stay with her 6s for another year now. After all, she can literally buy a new MacBook for the price.
Apple has a problem in my opinion. The problem is an old one. Greed: and that will affect them if they don’t address it.
I have no problem with companies making healthy profits, and as an Apple shareholder I appreciate it. But the profit margins Apple are pushing are simply getting ridiculous. At some stage those margins effect the good will of consumers and that has long term consequences. In my case it means Apple is losing at least one year in deferred sales.
Apple would do well to remember the 10:1 rule. Negative sentiment is a powerful thing.
if you look at Apple's gross margins over the past 5 years, they've held steady at around 39%. Given that context in conjunction with rising prices, it tells me the cost of doing business has increased. What people are really arguing when they talk about Apple's increasing prices => is a gross margin of 39% too high?
Well written piece DED, except... For the dirst time ever I have held off on upgrading across the range of Apple devices (and with a family with four kids, that’s a lot of devices). That is, pure and simple, lost revenue for Apple. Macs, ipads, and iphones!
Why? Unlike Apple’s reporting, it’s simple. Pricing. While I suffer from the ‘far far away’ tax living in Australia, the real issue is Apple’s incessant raising of prices: on everything!
I was ready to upgrade all of my kids Mac minis this year. I was excited when the rumours pointed it to the upgrade. Then the pricing was announced. You must be joking. People were talking of the performance increase being worth it. Really. If I waited 5years I would expect to get at least the increase Apple announced; and not pay a 50+% premium for it.
My wife was going to buy a new iPhone XS. Then the new pricing came out. My wife is going to stay with her 6s for another year now. After all, she can literally buy a new MacBook for the price.
Apple has a problem in my opinion. The problem is an old one. Greed: and that will affect them if they don’t address it.
I have no problem with companies making healthy profits, and as an Apple shareholder I appreciate it. But the profit margins Apple are pushing are simply getting ridiculous. At some stage those margins effect the good will of consumers and that has long term consequences. In my case it means Apple is losing at least one year in deferred sales.
Apple would do well to remember the 10:1 rule. Negative sentiment is a powerful thing.
if you look at Apple's gross margins over the past 5 years, they've held steady at around 39%. Given that context in conjunction with rising prices, it tells me the cost of doing business has increased. What people are really arguing when they talk about Apple's increasing prices => is a gross margin of 39% too high?
Yeah, I think a lot of people misunderstand why Apple makes so much money.
It isn't that their gross margins are out-of-line (on the high side). It isn't that their prices are so high relative to what it costs to produce their products. Frankly, I think Apple had been leaving a fair bit of money on the table by offering a limited range of new products and pricing them (or at least the best among them) lower than the market would accept in order to pull in a bit more of the middle range of markets - essentially, sacrificing profit in the short-term to build greater install bases. They seem now to have shifted somewhat from that strategy. They are offering a wider (quality and price) range of products in order to achieve both goals - capturing the money they had previously been leaving on the table from the high end of their lines, from the people who don't mind paying more, and also being able to sell to those who want (or need) to pay less.
Apple has stratified its lines. That, of course, has disadvantages. But it allows Apple to better balance both goals - maintaining or growing install bases and capturing market-appropriate profits from their high-end products. I know a lot of people complain about the prices of Apple's products, particularly their high-end products. But considering the capabilities of such products, and how large a role they now play in our lives (and how many things they replace), I think they represent some of the best value propositions out there. Compare how much we spend on iPhones to how much we spend on other things which are so important in our lives, and for a large number of people a thousand dollars - or even two thousand dollars - every couple of years isn't that much money. We spend 10 or 20 times that on our vehicles. Are they 10 or 20 times more important in our lives? Is how well they work 10 or 20 times more impactful on our lives?
Returning to why Apple makes so much money. Again, it isn't because they have huge gross margins. It isn't because they make inappropriately high amounts on individual sales. It's because they sell such high volumes of premium products. They make appropriate margins on the premium products they sell. If anything, they make less than what might be expected from such premium products. But they sell so many of them. Other companies, for the most part, aren't able to sell that many of those kinds of products. What Apple has been able to achieve is remarkable. Typically companies either get to sell aspirational products on which they realize fairly large margins, or they get to sell large volumes of products to the mainstream on which they realize fairly modest margins. Apple is able to do something which most companies could only dream of doing - sell aspirational products to the mainstream, sell them in very large volumes.
It is the volume which creates a large pool of gross profit (even with reasonable gross margins) which drives Apple's great profitability. That large pool of gross profit exerts great leverage on Apple's operating expenses. That means... extraordinary profit. And Apple is incredibly operationally efficient. It is a very well run company, especially considering its size.
There are other issues as well. For instance, without getting too deep into it, because of what Apple's been able to do with its own distribution channels it has great leverage when it comes to third-party retailers. That allows it to, in effect, capture part of what would otherwise be retail margin for itself. So, without increasing retail costs to consumers, Apple gets to keep more of those retail costs for itself. That comes from retailers rather than from consumers. Retailers get other benefits in lieu of that margin, so they still think it's worthwhile to sell Apple products.
Hmm. The thrust of the article seems to be that Apple withdrew unit sales data because analyst/pundits were “holding it the wrong way” (if you recall Antenna-gate).
Without endorsing the anti-Apple clickbait faction, I think the Apple fanboy defensive reactions are flat wrong.
1- Apple is not a diversified consumer electronics company. Its current value is largely dependent on iPhone sales. Period. Unit sales are routinely reported by other companies where these drive material revenue and income, and thus company valuation. This is a move against investor transparency and the market has reacted as such since the announcement.
2- Apple may aspire to be a services company, but it’s not there now. Unlike Microsoft, Apple’s service revenue is a function of its hardware success. That’s not to cast judgment on the benefits of hardware/software integration (there are many) but to say that unit sales is unimportant in assessing the direction of hardware health is misdirection, not “courage.”
3- I believe Apple went into headphone jack mode on the unit sales metric in part because it aspires to redirect conversation in how much Apple now relies on extracting ASP economic rent from its installed base to meet margin and growth targets. There is nothing irrational about this strategy (although Apple is laboring against long-standing trends of tech being driven by offering more for less over time). However, Apple is pushing the limits of price elasticity and customer acceptance. And Apple, in my opinion, doesn’t want to deal with what it may believe to be analysts/pundits “holding the phone the wrong way” in trying to determine whether Apple is successful in this effort.
Bottom-line: less information disclosure is unfriendly to the public owners of the company. If management believes information disclosure interferes with the operation of the company, they can try to take the second-most valuable public company on the planet private. As Apple customers, I think believe this move is customer-unfriendly as this slightly obscures the economic rent Apple is charging us in its current high ASP vs growing sales strategy.
"Carriers confirming that they are seeing higher than average return rates on the X-style iPhones, with some stores reporting return rates to be amongst the highest return rates they have seen. Obviously, Apple wouldn't be reporting on this, now would they? "
"Internally, Apple is well aware that they are in trouble"
Honestly, based on what evidence?
The evidence is actually all around, and I have laid it out - go to any carrier partner store, and casually strike up a conversation about issues with the new X models - each one will echo the same sentiments of either "no sales because of prices", "no sales because of Home Button", and "high return rates because of Home Button". After this has occurred to me at one store (the one where I returned the iPhone XR that I had erroneously purchased), I went to 26 other stores, all different carriers and stores, and received the same feedback. I also received the same information from individuals that are 'inside', confirming all of this.
Will I provide names and spreadsheets to support this? Absolutely not. The evidence is plain to see, if you just read between the lines of Apple's damage control statements, and what they are doing.
Some people will refuse to look, or see it. That's fine. I just want to point out what, to me, is obvious.
they can try to take the second-most valuable public company on the planet private.
Which is their long-term plan - or at least to to buy back enough in order to completely independent from any institutional shareholder influences. This is the reason for their buy-back program, not what the usual analysts think ("showing confidence in their own company", which is the usual reason why companies do this).
Well written piece DED, except... For the dirst time ever I have held off on upgrading across the range of Apple devices (and with a family with four kids, that’s a lot of devices). That is, pure and simple, lost revenue for Apple. Macs, ipads, and iphones!
if you look at Apple's gross margins over the past 5 years, they've held steady at around 39%. Given that context in conjunction with rising prices, it tells me the cost of doing business has increased. What people are really arguing when they talk about Apple's increasing prices => is a gross margin of 39% too high?
Their gross margins, on some premium products, are as high as 54%, if you look at their recent results.
I'm in the same boat as you are - while their premium products are priced ridiculously high (I am loathe to pay $1300 for an iPhone), they have also managed to make the product less desirable by disrupting their own consumer goodwill.
If the new X phones were insanely great (and the hardware does qualify) but did not present a cluster**** of a gesture UI (copied from Android, to make matters worse), by getting rid of the iconic Home Button, then the upgrading customer base would respond by WANTING these units -- as it stands, that's not the case, and Apple feels they need to force those models onto us.
On the other hand, Android switchers appreciate that the gesture based UI is identical to the Android devices they are laving behind - which is nice, but that wasn't Apple's reasoning.
Comments
It was interesting to see which of your tentpoles would rise higher -- irrational hatred/criticism for DED pieces, vs disliking the disclosure of unit sales not done by the rest of the industry.
It's a matter of time that's all. In a few years after Apple continues to perform and report as most other companies do the moaners saying it is a 'disservice' will have moved on to some other trivial anti-Apple moan.
Hey, not even a window in that sense, check out the Stock App now, it's a seamless integration of an iOS app in Mojave. I can't wait for more useful apps like that that don't require a web browser.
- Joswiak's interview with him stating that the iPhone XR has been consistently outperforming iPhone XS and XS Max sales, is being reported variously as "iPhone XR is best selling iPhone!", when that's not what he said. It really means that the iPhone XR is selling better than the two insanely over-priced iPhone XS and XS Max models, both of which aren't selling as well as they should. These are the sort of interviews that are being released as Damage Control media releases.
- Carriers confirming that they are seeing higher than average return rates on the X-style iPhones, with some stores reporting return rates to be amongst the highest return rates they have seen. Obviously, Apple wouldn't be reporting on this, now would they?
- Luca Maestri announcing how Apple will no longer report unit sales, giving some convoluted PR-sounding reason. Apple has always reported unit numbers WHEN IT BENEFITTED THEM, and not done so, when the numbers would have been inconvenient. This is what happened when the Apple Watch was originally released, remember? Again, Damage Control.
As we know, it's nothing new for Apple to deny, deny, deny -- we have seen this several times in the past (Antennagate, for example) and then quietly release fixes. Thus, the Damage Control we are witnessing should come as no surprise.
Likewise, and as usual, the various pundit blogs and websites engage in the usual acrobatics in their effort to keep pretending there is nothing wrong. I usually expect this from John Gruber, who would never admit that Apple does anything wrong, but am surprised to see a similar sort of Stockholm Syndrome surface in Daniel Eran Dilger's writing (especially considering the animosity between the two).
There will come a point when we have to admit that the Emperor Has No Clothes -- and the sooner this happens, the better for everyone. Internally, Apple is well aware that they are in trouble, and Apple is counting on their loyal acolytes to *want* to believe that nothing is wrong, so they can fix it.
Unfortunately, a real fix is still 2 years away -- because it will take another year for Apple to continue their mistake, until their sales slump becomes too obvious, before they will change course - which will take another year.
Go ahead, fanboys - fire away. I'm expecting it.
"Internally, Apple is well aware that they are in trouble"
Honestly, based on what evidence?
For the dirst time ever I have held off on upgrading across the range of Apple devices (and with a family with four kids, that’s a lot of devices). That is, pure and simple, lost revenue for Apple. Macs, ipads, and iphones!
Why? Unlike Apple’s reporting, it’s simple. Pricing. While I suffer from the ‘far far away’ tax living in Australia, the real issue is Apple’s incessant raising of prices: on everything!
I was ready to upgrade all of my kids Mac minis this year. I was excited when the rumours pointed it to the upgrade. Then the pricing was announced. You must be joking. People were talking of the performance increase being worth it. Really. If I waited 5years I would expect to get at least the increase Apple announced; and not pay a 50+% premium for it.
My wife was going to buy a new iPhone XS. Then the new pricing came out. My wife is going to stay with her 6s for another year now. After all, she can literally buy a new MacBook for the price.
Apple has a problem in my opinion. The problem is an old one. Greed: and that will affect them if they don’t address it.
I have no problem with companies making healthy profits, and as an Apple shareholder I appreciate it. But the profit margins Apple are pushing are simply getting ridiculous. At some stage those margins effect the good will of consumers and that has long term consequences. In my case it means Apple is losing at least one year in deferred sales.
Apple would do well to remember the 10:1 rule. Negative sentiment is a powerful thing.
if you look at Apple's gross margins over the past 5 years, they've held steady at around 39%. Given that context in conjunction with rising prices, it tells me the cost of doing business has increased. What people are really arguing when they talk about Apple's increasing prices => is a gross margin of 39% too high?
It isn't that their gross margins are out-of-line (on the high side). It isn't that their prices are so high relative to what it costs to produce their products. Frankly, I think Apple had been leaving a fair bit of money on the table by offering a limited range of new products and pricing them (or at least the best among them) lower than the market would accept in order to pull in a bit more of the middle range of markets - essentially, sacrificing profit in the short-term to build greater install bases. They seem now to have shifted somewhat from that strategy. They are offering a wider (quality and price) range of products in order to achieve both goals - capturing the money they had previously been leaving on the table from the high end of their lines, from the people who don't mind paying more, and also being able to sell to those who want (or need) to pay less.
Apple has stratified its lines. That, of course, has disadvantages. But it allows Apple to better balance both goals - maintaining or growing install bases and capturing market-appropriate profits from their high-end products. I know a lot of people complain about the prices of Apple's products, particularly their high-end products. But considering the capabilities of such products, and how large a role they now play in our lives (and how many things they replace), I think they represent some of the best value propositions out there. Compare how much we spend on iPhones to how much we spend on other things which are so important in our lives, and for a large number of people a thousand dollars - or even two thousand dollars - every couple of years isn't that much money. We spend 10 or 20 times that on our vehicles. Are they 10 or 20 times more important in our lives? Is how well they work 10 or 20 times more impactful on our lives?
Returning to why Apple makes so much money. Again, it isn't because they have huge gross margins. It isn't because they make inappropriately high amounts on individual sales. It's because they sell such high volumes of premium products. They make appropriate margins on the premium products they sell. If anything, they make less than what might be expected from such premium products. But they sell so many of them. Other companies, for the most part, aren't able to sell that many of those kinds of products. What Apple has been able to achieve is remarkable. Typically companies either get to sell aspirational products on which they realize fairly large margins, or they get to sell large volumes of products to the mainstream on which they realize fairly modest margins. Apple is able to do something which most companies could only dream of doing - sell aspirational products to the mainstream, sell them in very large volumes.
It is the volume which creates a large pool of gross profit (even with reasonable gross margins) which drives Apple's great profitability. That large pool of gross profit exerts great leverage on Apple's operating expenses. That means... extraordinary profit. And Apple is incredibly operationally efficient. It is a very well run company, especially considering its size.
There are other issues as well. For instance, without getting too deep into it, because of what Apple's been able to do with its own distribution channels it has great leverage when it comes to third-party retailers. That allows it to, in effect, capture part of what would otherwise be retail margin for itself. So, without increasing retail costs to consumers, Apple gets to keep more of those retail costs for itself. That comes from retailers rather than from consumers. Retailers get other benefits in lieu of that margin, so they still think it's worthwhile to sell Apple products.
Without endorsing the anti-Apple clickbait faction, I think the Apple fanboy defensive reactions are flat wrong.
1- Apple is not a diversified consumer electronics company. Its current value is largely dependent on iPhone sales. Period. Unit sales are routinely reported by other companies where these drive material revenue and income, and thus company valuation. This is a move against investor transparency and the market has reacted as such since the announcement.
2- Apple may aspire to be a services company, but it’s not there now. Unlike Microsoft, Apple’s service revenue is a function of its hardware success. That’s not to cast judgment on the benefits of hardware/software integration (there are many) but to say that unit sales is unimportant in assessing the direction of hardware health is misdirection, not “courage.”
3- I believe Apple went into headphone jack mode on the unit sales metric in part because it aspires to redirect conversation in how much Apple now relies on extracting ASP economic rent from its installed base to meet margin and growth targets. There is nothing irrational about this strategy (although Apple is laboring against long-standing trends of tech being driven by offering more for less over time). However, Apple is pushing the limits of price elasticity and customer acceptance. And Apple, in my opinion, doesn’t want to deal with what it may believe to be analysts/pundits “holding the phone the wrong way” in trying to determine whether Apple is successful in this effort.
Bottom-line: less information disclosure is unfriendly to the public owners of the company. If management believes information disclosure interferes with the operation of the company, they can try to take the second-most valuable public company on the planet private. As Apple customers, I think believe this move is customer-unfriendly as this slightly obscures the economic rent Apple is charging us in its current high ASP vs growing sales strategy.