“Most comment on Apple’s decision to stop reporting its unit sales figures has focused on the negative signal — the possible future decrease in year on year sales of Apple products,” Abhi Ramchandani writes in a letter to Financial Times. “However, it is essential to examine the more nuanced, positive signal: Apple trying to keep its secret formula secret.”
“Classical theory suggests that if market competitors realise that abnormal profits exist in a sector, they will flood the market until no abnormal profits remain,” Ramchandani writes. “Future secrecy on iPhone sales figures could be beneficial to maintaining profitability, since competitors would no longer know areas of sales where abnormal profits remain (ie, areas where iPhone sales are formidable).”
Ramchandani writes, “The recent tumble in Apple’s stock price shows that investors have taken its decision as a reason to despair; however, there might not be much to worry about, after all.”
Read more in the full article here.
MacDailyNews Take: Exactly. As Apple did and does with Apple Watch, there’ no reason to give competitors valuable data when you don’t need to do so!
The thesis some have that Apple will no longer disclose iPhone unit sales because iPhone units sales are flat or will decline in future quarters ignores the fact that Apple will also stop revealing quarterly Mac unit sales figures which just rose 42% sequentially. — MacDailyNews, November 2, 2018
SEE ALSO:
Why Apple’s unit sales reporting doesn’t matter anymore – November 2, 2018
The ‘smart money’ shrugs off Apple’s decision to no longer disclose unit sales – November 2, 2018
Apple rams their message home: Think ‘Apple as a Service’ – November 2, 2018
Investors bristle as Apple occludes iPhone unit sales data – November 2, 2018
Apple’s decision to stop reporting unit sales of iPhones, Macs, and iPads is a ‘defining moment’ – November 2, 2018
Apple to stop reporting iPhone, Mac, and iPad quarterly unit sales – November 1, 2018
Apple tumbles 7% after reporting record-breaking quarterly earnings – November 1, 2018
Apple beats Street with another record-breaking quarter – November 1, 2018
Apple has traded being a company dependent upon the Mac to being a company dependent upon the iPhone and that market has topped out- repeat, topped out. Smartphones are now a mature market.
They have driven the ASP up but that only works once or twice before demand destruction sets in. For all the time and money spent on Apple Music, they have converted a mere sliver of iTunes accounts to rental.
The Apple of today has a lot of overhead- lots of mouths to feed- and the sales of everything not an iPhone is but a smallish part of the company. If Apple thinks services will bring back the glory days of earlier times with the iPhone, they are fooling themselves because Apple is not that good at services. Still. At this late hour.
Well stated DavGreg!
What is often forgotten is that device sales and market share drives purchases of services.
What in the world are you talking about? Even if sales are flat they are 20x the closest competitor in the high end market where the only profit is made. As for not good at services i certainly that was some smug humor since they brought in over 10 billion with a B in 1 quarter and lets look at the offerings from other competitors. Oh they’re terrible? thats what i thought you would say and you are right. Services have been up 20% or more Yoy for the past 10+ quarters and apple now does more in services than galaxy does in sales in a quarter. I could not be happier with the stock price drop… excellent buying opportunity and i have loaded up. I am putting this on paper right now apple will be north of $220 a share by the end of the year. The will report another record q1 in January and MDN will post another article about how supply chain rumors are never right and only work so the big brokerages can drive pricing down to buy back in. apple is the smartest company in the world and the only reason there is such negativity around them is because no one else can figure out how they are doing it…
hint: well made products ahead of the competition in features people actually use and care about. They provide the best customer service in the industry and they stay focused on a core set of products so as not to repeat their own and everyone else’s mistakes of the past of diversifying and making a bunch of crap instead of a few really good products.
Exactly. Here’s the smartest thing I’ve heard since the earnings report. Why should a company tipoff its competitors to unit volumes? Dumb. I’ve wondered this for some time since Apple seemed to be the only company doing so. I’m very glad they never did for the Apple Watch. I think they were testing the water with this approach and the Watch. There are a number of other big cash sources but everyone seems to only focus on the iPhones. Let the Anal-lysts actually try to do some work instead of handing it to them. Watch, they’ll still get it wrong.