Why Tim Cook can’t remain totally mum about Apple Watch results next week

“Apple reports earnings next Tuesday after the close, and naturally the market will be watching to see what the Mac maker has in store,” Evan Niu writes for The Motley Fool. “Of course, the iPhone’s performance will be the most financially important to the company.”

“At the same time, investors are going to want to hear how the Apple Watch fared during its launch quarter, because the new wearable device represents the first new product category that Apple has entered in five years,” Niu writes. “The company has already braced investors for some opacity, saying last October that it would include Apple Watch sales in its “Other Products” category. Apple simplified its reporting for fiscal 2015, and doesn’t intend to break out Apple Watch performance explicitly.”

MacDailyNews Note: Last October, Apple stated that they would not be reporting Apple Watch sales figures:

We’ll be creating a new reporting category called other products. This will encompass everything we report in the accessories category today, including Beats headphones and speakers, Apple TV, and peripherals and accessories for iPhone, iPad, Mac, and iPod. In addition, we’ll begin to include iPod sales in the other products category, and we will also reflect sales of Apple Watch in this line item once it begins shipping in early calendar 2015. — Nancy Paxton, Apple’s Senior Director of Investor Relations

I’m not very anxious in reporting a lot of numbers on Apple Watch… because our competitors are looking for it. – Apple CEO Tim Cook

“But realistically, Apple can’t remain completely mum about Apple Watch’s performance,” Niu writes. “There simply will be too much interest for Apple to ignore, and Tim Cook will inevitably be grilled by Wall Street analysts to spill the beans. Disclosing absolutely nothing would be a mistake, because investors would assume the worst, and Apple doesn’t want that.”

“The last thing that Apple wants is for investors to believe absurd headlines like, “Apple Watch Sales Plunge 90%,” and succumb to the ensuing hysteria,” Niu writes. “Apple will want to change that narrative as soon as possible, and the easiest way to do that is to provide a nugget or two of data… What I believe is most likely is that Apple will casually provide some approximate figure of unit volumes without disclosing a precise revenue figure. Perhaps something like, ‘more than 5 million units,’ which would be vague enough to achieve Cook’s stated strategic disclosure goals while also allaying fears about weak demand.”

Read more in the full article here.

MacDailyNews Take: Here’s a little something that Brett Arends, the MarketWatch hit-whore who started this “Apple Watch Sales Plunge 90%” hysteria scribbled for MarketWatch back in January 2011:

Here’s how it’s going to go down: First, scammers will go into the derivatives market and buy a bunch of put options on Apple shares. Puts are effectively a bet that a stock will drop quickly. Then they’ll send out word that Steve Jobs is terminally ill with cancer and isn’t expected to return to work. Simple. Easy. Free money.

(Above, substitute “Steve Jobs is terminally ill with cancer and isn’t expected to return to work” with “Apple Watch sales plunge 90%.” – MDN Ed.)

The stock will plummet. Nervous investors will bail in panic. The put options will balloon in value… The scam artists will cash out, and walk away What makes this possible is Apple’s refusal to say anything whatsoever about Jobs’s illness or his absence… Nature abhors a vacuum. And if Apple won’t offer details, that leaves the door wide open for others.

Arends saw the door wide open, an information vacuum into which he happily took a dump.

A little bit of real data – doesn’t have to be the hardest data, just enough to mollify the analysts – from Apple on Tuesday will obliterate tripe of the sort peddled by hacks like MarketWatch‘s Brett Arends.

71 Comments

  1. Apple is a publicly traded company and is subject to public scrutiny like any other public company. Openness and transparency of sales data, finances, debts, etc are part of Apple’s contract with the public. Apple’s honesty with the public is just as important as its stock price.

    1. Tim Cook is actually ashamed of the Apple Watch.

      Sort of like Frankenstein being ashamed of his monster, lol.

      This product is so lame, it actually tarnishes the former great name of Apple.

      As a long time Apple user, I use the word ‘former’, because since Tim Cook has taken over:

      * Innovation has ceased
      * Quality control is either non-existent or has gone down hill
      * Employee morale has remained at an all time low
      * The iPad has languished, due to lack of attention
      * The company is running off the steam of Job’s innovation
      * Gay rights has become the cornerstone of Apple politics
      * Shoddy products and software updates/releases are the norm

      Some give TC credit for the leap in stock, but truth be told, a chimpanzee with a learning disability could’ve done just as good or better, because Apple is just riding off Steve Jobs’ contributions.

      1. Apple_Watch_Embarassment:

        You are 100% correct. A monkey could have inherited Apple and done what’s it’s done. Jobs created the iPhone. The iPhone is over 50% of Apple’s revenue.

        When one looks past the Watch and at Music, one can see just how screwed up Apple has become under Tim Cook. What a mess.

        1. I’ve had my Apple Watch since launch day and have been very impressed with it. I was a doubter when they first announced the Watch but decided to try one when pre-orders started, I ordered one. I will never give up my Watch. It is awesome 🙂

          Pay arrived in the U.K this week and having used it, every single person around me when paying has been dumbstruck by the technology. All mighty impressed.

          I used it today in my local village store, announcing to the store owner that “I’m going to pay with my watch”. He laughed and said “Yeah right, I’d like to see that!”. He rang my items up and I used my Watch with the contactless card unit. The owner and two other customers in line were totally amazed, with audible gasps of astonishment. They all wanted to know more, so, I explained to them how it all worked.

          The owner of the shop said “I have got to get one of those, it’s brilliant”, one customer said she’s due an upgrade on her contract so will definitely get an iPhone 6 so she can use Pay and will probably also get a watch. The other customer had just upgraded to a Samsung, but was within 14 days so said they’d try and swap it for an iPhone 6 so they could use Pay too.

          The more people see Pay and Watch in real life situations, the more people will adopt it and demand will shoot up for iPhone and Watch.

          All you Watch doubters, should start looking at humble pie recipes with pie tins at the ready. The Watch is another defining product from Apple, just like the iPhone, iPad, iPod, iMac, MacBook Air etc that came before it.

          Cook and  know exactly what they’re doing.

          1. deecees:

            No Cook and Apple do NOT necessarily know what they’re doing. Just because YOU like the Apple Watch doesn’t mean anyone else does or that many people do. You commit the fallacy of fallacious reasoning because your sample set is not big enough to make a conclusion as you have: your sample set is yourself and few fellow fanboys.

            At this point, all we have to go off of is our observations because Apple isn’t reporting numbers. Those observations tell us that the humans around us in the world aren’t wearing an Apple Watch. This is strong prima pacie evidence that the Watch has not sold well.

            Further, just because you “want” people to want and find use of an Apple Watch doesn’t mean they will. It’s not up to you. If it’s useful and affordable, then it has a chance of selling to consumers. If people find value in it then it has a chance of sales.

            Personally, I found little use in it. I’ve put it away and am storing it as part of my Mac collection. It’s just too redundant and doesn’t do enough well to use in my case.

            1. And just because you haven’t found a use for it and have decided to store your purchase for future generations to marvel (or laugh) at, doesn’t mean you are representative of everybody or anybody else.

              The store owner and customers there today may or may not be fanboys (two were female so you’re sexist too), they were interested in what I had done with my watch. Interest does not a fanatic make. But you probably know better there as well.

              I never commented on my ‘wants’ so you have no basis for comment you arrogant arse. People will find their own uses for the technology.

              The points you direct at me are equally applicable to you yourself, unless you are implying you know better than everybody else and only your opinion matters? In which case go hide back up your ass you egotistical asshole.

              Cook and  do know exactly what they’re doing as is reflected in stunning results time after time, but of course you know better don’t you?

            2. After paying with your watch and drawing the gasps of astonishment…. you being certain that you are hearing what you are hearing, no doubt…did the villagers then ask you to make it rain? Whom gods destroy, etc…

          2. Your fantastic story inspired this idea – rough sketch of an Apple Watch ad:

            Classic music opens with a guy dressed in 1920’s attire standing at a store checkout. He pulls-out his bulging full of stuff wallet from his pocket and takes out $1 bill to pay for something. Words at bottom of scene “The way we paid 1800-1980”

            Cut scene – same guy dressed in 80’s prep attire at the store counter (flipped-up collar, etc). Same classical music playing. Takes wallet out of pocket and tries to find cc to pay, struggles to find correct card. Words – “The way we paid 1980 – 2015”.

            Cut scene – same guy, but confidently dressed as every man in today’s attire. He is also is wearing discrete wireless headphones. When he goes to pay the watch face is shown and he pauses the classic music. The scene then cuts to him holding the watch over a reader to pay. Words – “the Today way to pay – Apple Watch”

            Scene fades to image of an Apple Watch and the Apple Pay Logo. “Wireless headphones sold separately.”

            1. The reason why I included the pausing of the music was to show that the watch can also store music, which I think is a big feature. It also implies that the Apple Watch can do more than just pay for items. The “wireless headphones sold separately” at the end ties-in the music feature again. It also communicates to non-techies that wireless headphones do exist now, Apple sells them and they work with the Apple Watch. It gives people a wow moment and reminds us that Apple is a magical innovator.

          3. I used Apple Pay for the first time at my local Mercedes-Benz dealer. I needed a new cabin air filter for my Sprinter conversion van,and when paying, noticed they had an NFC capable gizmo, so doubled-clicked the side button in my Apple Watch, and Voila! the reader beeped, and I was all done. The cashier and customer behind noticed and seemed impressed. I have to say it was fun to use.

            I saw my first Apple Watch in the wild almost literally ‘in the wild’ in the Texas Hill Country. I was taking a scenic route on Willow City Loop north of Fredericksburg, and hadn’t passed a car for miles, when a couple of women driving the opposite direction flagged me down to inquire about the location of a particular ranch (which I knew nothing about), and the woman in the passenger seat got out, came over to my window to ask me the particulars, when I noticed she was wearing a 38 mm stainless steel Apple Watch with Milanese loop. I said, ‘Nice watch’ while pointing to my space gray 42 mm sport. I found it ironic I’d see my first Apple Watch in the middle of nowhere.

            1. Wow, Willow City Loop. So very familiar. My father lived the last years of his life happily ensconced in his beautiful 50 acre ranch near the intersection of FMs 2721 and 1320.

      2. The iPad has languished because the tablet market is near saturation. Sales are increasingly replacements for existing iPads or competitor’s tablets.

        Gay rights is neither here nor there. Most younger heterosexual people see gays as the canaries in the coal mine when it comes to privacy and dignity. An anti-discrimination policy that includes gays gives a company a competitive edge in hiring non-gays.

        Some of your criticism is valid. Apple isn’t doing usability testing on UIs. Otherwise they never would have released iOS7 with a feature that makes a significant number of people dizzy. They are putting out operating systems too rapidly, otherwise Yosemite Mail wouldn’t have the same memory leak as Mavericks Mail.

      3. Wow, you sure are a clueless, transparent POS. Get a life. If Apple’s not for you, go buy elsewhere. Whining, attacking Cook, the most successful CEO on the planet, and holding your breath till you turn blue will have zero impact on the world other labeling yourself beyond a shadow of a doubt as one who lacks any credibility. In other words, you are impotent, in most likely more ways than one.

      4. Wow. I’m so impressed that an asshole who hides behind an anonymous name like “Apple_Watch_Embarrasment” can have such great insight into Apple. If you’re going to post this mindless crap why not do it using your real name? I use mine. I don’t give a damn if someone gets offended. Don’t be such a pussy.

    2. Apple is honest, but they do not have to break out the watch sales data from the “Other” category that they are lumping it in with, which could be all sorts of things like accessories, iPods, even software sales and service contracts.

      1. If Apple does’t come clean with Apple Watch sales (or any other Apple product) Apple isn’t completely honest. If Apple isn’t completely honest Apple isn’t completely trustworthy. If Apple isn’t completely trustworthy Apple’s reputation is diminished. If Tim Cook is willing to diminish Apple’s reputation Tim Cooks loses his status as CEO.

        1. So, if Apple doesn’t give away trade secrets, that’d also be not completely honest, according to your theory.

          I don’t think honesty means what you think it means.

          Dishonest would be lying about their profit numbers. And, btw, do you hold Amazon to this same standard? You know, the people who NEVER give sales figures for their devices? Or Samsung, or any other competitor?

    3. An understandable sentiment, but unfortunately, the track record of such publicly traded companies (not just Apple) indicates otherwise.

      Case in point: where in each Quarterly Report has Amazon disclosed the unit sales of Kindle? Similarly, unit sales reports at Samsung of each smartphone type (so that the public can differentiate between comparable-to-iPhone-smartphones from Featurephones-which-now-happen-to-run-on-Android), etc.

      Apple has clearly stated that they see public reporting of unit sales of the Apple Watch as information that’s useful to their competitors…I don’t want to use the word “Trade Secret”, but the basic principle applies.

      Finally, it is possible for one to be honest without being totally transparent. For any who chose to disagree, please include in your post your full name, address, SSN, DOB and Mother’s Maiden name … after all, _no_one_ would ever use such information rudely to their own advantage…right?

      -hh

      1. Great, Apple should mimic Samsung. Way to go, Apple, lower your standard to those of Samsung. In a few years consumers won’y be able to tell the difference between either company.

    4. No, Apple does not have a contract with “the public”. They only have a contract with shareholders and while there are rules regarding transparency, companies have a lot of discretion about what they do and do not disclose. You should learn what publicly traded means.

    5. This is all pretty silly. The Apple Watch is being included in a line item that includes other known accessories with well established and consistent earnings. So it’s just a matter of subtracting the boost in earning from the category and that will represent the Apple Watch’s earnings.

      What it won’t do is give unit sales, which is what the competitive issue is, and is of little to no benefit to shareholders as compared to overall earnings

      1. And unit sales can’t be deduced from total revenue without a good idea of the mix. Tim Cook does not want to disclose that, any more than he wanted to reveal the mix of 5c and 5s models last time around. The analyst industry will not give up, however. This is only the latest episode of CSI Cupertino, with the usual suspects in the lineup and the usual twist at the end.

    6. Apple has to respond to government oversight and its shareholders. It is not responsible to be “open and transparent” to the public if that reveals information that could help its competitors.

      No one but this bozo ever said that Apple would say “absolutely nothing” about the sales of Apple Watch. Cook will undoubtedly make some general references to sales versus expectations, and might offer some specifics, such as unit sales during the first weekend or week to support those statements.

      If Apple believes that there are good reasons to keep some of the sales data private, then I support that approach. It is not as is withholding that information will harm anyone. People are getting way too full of themselves and their “right to know.”

    1. I live in a city two hours from the nearest Apple Store. I haven’t seen an Apple Watch except on the interwebz. I have not worn a watch since I quit being a cop in favor of being a graphic designer 20 years ago, I don’t see a need for a generation 1 watch, but I’m willing to let Apple suck me in with a future generation watch.

      1. More anecdotal evidence likely signifying little, but here you go:

        I’m 15 minutes from an Apple Store and haven’t seen one “in the wild” – and while the store is always full of people every day – generally leaving with spendy merch – I noticed no action around the watch table (or was it tables? I forget as I have no enthusiasm for the product, so once I’d seen one up close, I moved on).

        And to be fair, actually I don’t know anyone wearing ANY smart watch – Android, Pebble, Apple, whatever. Fewer and fewer watches of any kind for that matter.

        A few fitness bands is it. And if the $10-15 Mi Band makes it here, I might play.

        Otherwise I’ll get a wearable when my doctor says so or when the the state of the art is 2-3 gens down the road from what I can see of the trends and rate of evolution.

    2. Just saw several today. I see them at work, too, in increasing numbers. Time will tell.

      I find it interesting how desperate some people/groups are to portray the Apple Watch as a failure. Apple’s worst products tend to be better than the best products from many other companies.

  2. It’s really simple. If Apple has something to brag about, they press release it and release numbers. If it’s nothing to brag about, they don’t release figures and/or throw it into the other services/product category to hide numbers.

    The only reason they said they won’t report Watch numbers isn’t because of what they said: to not have competitors know the numbers. The real reason is that they have tried to cover their butts in case the product doesn’t do well.

    I’m just waiting for the book that went inside Tim Cook’s Apple with a big chunk on Apple Watch and how there were people at Apple that dissented from doing that product. The whole story behind this product. I’ll bet the book would discuss this very issue about not reporting numbers being a strategy at Apple because several top people thought it would fail.

      1. It’s a new device and a building period for Apple, only the start of another something big. Investors with any sense of vision will know this and applaud it regardless of the numbers, which should be most respectable – they are winning the smart watch market period. It’s hardly an end market destination which idiot anal-cysts with self-enriching agenda’s try to paint. 2nd generation Apple Watch’s will experience even more explosive growth no doubt.

  3. Niu was quoted as saying, “Disclosing absolutely nothing would be a mistake, because investors would assume the worst.”

    Apple will not be disclosing “absolutely nothing.” It has already stated that it will be reporting Apple Watch sales in the Other category. A simple Q/Q and YoY comparison of that category will quickly give analysts a fairly good picture of Apple Watch revenues.

  4. What difference does it make if the Apple Watch turns out to be a successful minor product rather than a successful major product? Would Apple discontinue the Airport Extreme just because it doesn’t have a huge market share?

      1. The criterion for selling a product is its profitability, not its market share. As long as Apple Watch rakes in the dough, who cares about market share?

        I must add that I’m puzzled by Apple Watch Edition. It sounds like a word is missing between “Watch” and “Edition.” There are three editions of the Apple Watch. Which edition is the Edition?

  5. I haven’t weighed in that much on the Apple watch or argued with the trolls because I’VE DONE IT ALL BEFORE WITH THE IPHONE and iPad.
    “the iPhone won’t sell, it’s got no keyboard, other phones are better, I don’t need it, never saw one in the wild”

    etc.

    actually Trolls can argue that looking at the numbers in a ‘certain way’ even the iPhone is a failure: Marketshare: iPhone about 20% Android 80%. Looking at that some idiots are even proclaiming that Android like Windows PC has ‘won the war’.

    but of course we know iPhone takes 90+ % of the phone market profits and Mac about 40% (with 10+ % market share). If we count PROFITS if Mac was a SEPARATE COMPANY it would be larger than Dell, Lenovo, Acer and a few of the other big PC makers COMBINED. so did Apple lose the PC wars?

    The Apple Watch probably outsold the iPhone, the iPod, the iPad at launch. Like the iPhone people will start adapting it when they see it’s usefulness when they see those using them OUTPERFORMING THEM. It’s a hyper competitive world, shaving half an hour to an hour everyday is 3.5 to 7 extra hours a week. I used the same argument in forums with the iPhone arguing with Blackberry fanatics that there was COMPETITIVE ADVANTAGE to the iPhone , at that time I said that the ‘touch screen could MORPH the device into different things’ etc. Apple haters laughed saying “what I was smoking with my Alien morphing device “. I’m hundred of thousands of dollars richer today from 2007 while the BB investors i argued with have lost 90% of their value.

    I believe Apple Watch numbers are larger than naysayers think (whether TC releases numbers or not), the Apple Watch will like iPhone and MAC take SIGNIFICANT PROFIT share of it’s own market segment. . Lastly does anybody really argue that Wearable is not the NEXT BIG FRONTIER? and Apple is poised to control it. even naysayer analysts say Apple watch is he best smart watch out there . Apple Watch WOULD GET EVEN BETTER OVER TIME and rivals like with the Phone will never really get their shit together because NONE of them has Apple’s commitment, R&D, cash flow (to pour into R&D) and the eco system. Trolls forget too that the watch could also boost profitable iPhones.

    So if trolls want to bash it go ahead, they weren’t going to buy aapl anyways and its a waste of my breath trying to them.

  6. I’m even more delighted with my Apple Watch than I anticipated. I am highly confident that sales are decent, whether or not Tim Cook elects to go against his earlier position and speak about it.

    My partner and I don’t work in high tech, but anecdotally we noticed numerous Apple Watch wearers during lunch hour on the street around the Whole Foods store in downtown Seattle (where numerous Amazon-type employees work). In just 30-40 minutes time, we noticed at least 12-15, and spoke to most of those people. The same goes for just regular shoppers in the popular Bellevue Square Shopping Center (where admittedly there is also a major Apple Store). (FYI, the way to bird-dog the Apple Watch is to look for the rectangular case, blacked-out screen, and the Crown protruding 3/4 of the way up on the outer casement edge).

    I am confident Apple Watch will be one of the “killer” Christmas presents in the upcoming Holiday Season. Certainly some of the owners of the half-billion iPhones that have been sold will be craving a new gadget to feed their lust. For one thing, intimate couples and (affluent/show off) teens will relish the new form of communications via the Watch’s TAPTIC features.

    Pundits say we don’t need another “convenience screen” on our wrist that duplicates the iPhone stowed in our handbag or pocket. Maybe these same pundits ridiculed automobiles with power window lifts or door locks or TV remote controls as being superfluous gadgets? They also neglect the unique, important features like fitness tracking and record keeping, or convenience and security of Apple Pay.

    And the microphone works so well on Watch, it’s a godsend for answering phone calls or responding to text messages while (solo) driving (not recommended for everyone, but extremely convenient compared to alternate ways of doing this).

  7. Can we just all agree on one simple thing: the Watch IS great, that’s not the point. t’s just a bit pricey!! As the iPhone felt too expensive at first. Let’s wait and see. Had the Watch been closer to 500$CAN, I would have bought one on day 1. That doesn’t mean it’s not good, just means it might take longer for takeoff. On the other hand, as an Apple investor, I’m puzzled about including it in the “Other” category. Looks bad, even if it isn’t. And Apple should know more than anyone that looks are everything…

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