Investors bristle as Apple occludes iPhone unit sales data

“First Apple Inc took away the headphone jack on its iPhones. Then it took away the home button,” Stephen Nellis reports for Reuters. “And now, it has taken away a closely watched performance metric that it has disclosed to investors for 20 years.”

“The Cupertino, California-based company on Thursday said that it will stop reporting unit sales data for its iPhone, iPad and Mac computer products, the latter of which it has given out since 1998,” Nellis reports. “Apple said the data is less relevant to the strength of its business as customers bundle products, such as an iPhone paired with its wireless AirPods headphones, along with paid subscription services like Apple Music to listen to songs and iCloud storage for photos.”

“The move cost Apple dearly, helping to send shares down about 7 percent in after-hours trading. They later settled at $207.81, about 6.5 percent below their previous close,” Nellis reports. “Now, Apple will give cost-of-sales data for both its total product businesses and its total services business, which will let investors evaluate a gross margin for both. In the past, Apple gave only an overall gross margin figure for the company. The new numbers are important for two reasons. First, they will show just how lucrative Apple’s hardware business really is. But more importantly, for the first time they give margin information on Apple’s services business, which reached $10 billion in its fiscal fourth quarter, up 17 percent.”

“Many of Apple’s fastest-growing businesses are subscription based, like its $9.99 a month Apple Music service,” Nellis reports. “And investors tend to value subscription business through a combination of their revenue growth rate and margins – information that Apple investors will now have, said Tien Tzuo, chief executive of Zuora Inc, a company that helps subscription businesses track their finances.”

Read more in the full article here.

MacDailyNews Take: Could you panicky dummies bristle it down below $200, please? We’re backing up the truck.

SEE ALSO:
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

34 Comments

  1. Nice job Pipeline.

    Massive, relentless liquidation of AAPL shares today. Investors are hammering Apple hard today, -7.0% and dropping. Volume a staggering 46 million shares and the trading day is not even half over.

    Massive liquidation of positions going on today. No doubt Warren Buffet is dumping shares. You dont see this kind of volume without huge positions taking a dump.

    Nice job Pipeline.

    1. if what you say is correct, than that is good news because Apple will buy lots of shares at &5 discount and that means less dividend for Apple to Pay in the near future.

        1. If you detest Cook so much, and feel he is incompetent to lead Apple, then why are you exposing yourself to financial losses by investing in a company under which he has total control and is, in your view, destroying the company you’re in which you are invested? You’re constantly bad mouthing your own investment…that’s just nuts.

        2. @ Von Tink

          Instead of complaining you should have done what Apple, Warren Buffet and other smart people have done, which is purchase more Apple shares at a seven percent discount and then be patient for it to pay dividends in the future.

        3. Not good news for today. But in the long run, things should be more stable and less susceptible to manipulation by speculating analysts who suggest that a .1 difference in the volume of phone sales spells apple’s doom. I expect that the 8% will be made up in a couple weeks, as the news is put in proper context. Nothing goes up in a straight line, forever. I considered buying more stock on the surprise “discount.” But aapl is already too large a percentage of my account.

      1. resident complainer Von Tink will disagree with you. I agree with what you say, as in Warren Buffet have to be really foolish not to take advantage of the seven percent apple share discount

    2. Patience, Ish.

      For Apple Shares it is always 1 step backwards, then two steps forward. No stock rises continuously but Apple can be very volatile when the Analystistas do their flamingo dance and whine getting people to sell then scooping up shares. Apple stock has risen consistently over time but in a zig-zag fashion. If you don’t like the volatility consider a nice index fund or utility company stock. If Warren Buffett, the single smartest investor who has only every purchased one tech stock (Apple) is buying/holding shares, then I am all in.

      As Buffett frequently points out, you should base your purchase on underlying company values and ignore short term fluctuations. If the underlying company values are are good you will be reward long term for you patience. Patience, Ish, Patience.

      1. What they’re really “bristling” at is they know they can no longer use iPhone sales as a tool for stock manipulation and now must look at the complete profit picture as they always should have been. That’s their real problem with this. And so act out like whiny babies by taking their toys back. Temporarily anyway.

    3. Investors are not hammering it today.
      The hamering happend in 1 hour at the conference call yesterday.
      Its been stable since.

      The market just needs time to adjust to Apples new approach and focus in what they will report.
      Once the market digest that all will be fine..imo .
      This was a great move by Apple for the long run..
      Take focus off units numbers and put it on quality of earnings by each category and as a whole.
      Plus lets not forget the massive record breaking yoy growth numbers they reported yesterday… completely overshadowed by panic over the new reporting paradigm.

      I applaud Apple for showing the guts to do this. It is a good move.
      In the meanwhile their buyback program just got a nice discount which means more shares will be retired…. and those who want in have a better entry point.
      I look at the long run.. short run bumps are expected.

      1. Agreed. Except…I think there is a restriction on share buybacks within so much time of earnings announcements. That may limit Apple’s ability to take advantage of this surprise “sale.”

    1. Same here. I’ve been investing in AAPL for many years and have seen plenty of periods of insanity like this. Fortunately I had a very successful August & September and now have an unexpected amount of money which I wasn’t originally expecting. The pound is having an unexpected surge against the dollar, so with AAPL suddenly being so low I spent a few thousand on AAPL this morning. It’s gone down a little since I bought them, but I have every expectation that it will prove to be another wise investment.

      Apple’s fundamentals are fabulous. They’re making colossal amounts of money with excellent prospects for the future, but the analysts are having a tantrum because Apple will no longer be providing the figures which the analysts have been abusing for many years. The analysts created this problem and Apple has addressed it. Common sense will hopefully return sooner rather than later.

  2. “The move cost Apple dearly…”

    No, in fact, it cost Apple absolutely nothing at all. The change in price of issued shares does not directly affect Apple in any way. This is a temporary temper tantrum from selected large investors who were already seeking a reason for profit-taking. The stock price will quickly bounce back and the grumbling about the loss of access to quarterly financial details will die out. No big deal at all.

    People are way too eager to panic and cry “doom and gloom” over little things.

    1. In fact, the lower price is a benefit, because it reduces the cost of the buy-back program and effectively reduces the cost of options Apple is paying in executive compensation. The interests of the company as an entity do not always align with the interests of individual stockholders. Management owes its primary fiduciary duty to the company, even if their decisions have an adverse impact on themselves and other constituencies.

        1. I don’t know where you live, Ish, but here in Texas the primary legal duty is to the long-term benefit of the entity, precisely because that is in the long-term interest of the owners. There is absolutely no duty to serve the short-term desires of the shareholders when that would conflict with those long-term interests. Pandering to greed would likely be an actionable breach of duty.

          At least that’s what I learned in law school nearly fifty years ago between taking breaths through my mouth.

          1. Minor correction: there is no duty to serve the desires of INDIVIDUAL shareholders. Management is obviously required to comply with a majority vote at a proper shareholders’ meeting, provided that the legal rights of the minority are respected.

          2. You have no clue what you are talking about. Those who work inside a company have a fiduciary duty to the OWNERS of that company. Work against the OWNERS and you are in SERIOUS trouble.

            Long term, short term, it does not matter. A shareholder is a shareholder.

            Try learning about what you claim to know. It will save you a tremendous amount of humiliation. No one believes you for even a second.

  3. Just read this on Buisnessinsider…. “Apple said it expected to generate revenue of $89 billion to $93 billion during the holiday quarter, a number on the low end of the $92.74 billion that analysts were hoping for.” Really that is on the low end? looks like it is slap in the middle and what other companies are making this much money?

  4. Dear Apple Investors on MDN,
    I am not an investor and I know virtually nothing about investment economics v. corporate health so I ask you a theoretical question:

    What are the ramifications to Apple’s viability as a corporation and its ability to (1) sell product, (2) invest in R&D, and (3) maintain its status as a beloved company to buyers of its products should its shares be reduced to zero? I say that its large cash horde makes it immune from the vagaries of market forces. Why or why not? What say you?

    1. It’s extremely unlikely that Apple could ever buy back all of it’s shares, so i don’t worry about hypothetical situations such as those you mention.

      Apple’s buy backs are a means of returning value to shareholders and is not part of a process to eliminate shareholders altogether. Buybacks also make a lot of sense while Apple pays dividends because they never again have to pay dividends on those shares they take back, which means that the dividends they do pay become even bigger.

      Buybacks make sense if the company management honestly believes the stock to be priced too low.

      If you want to study a huge company which does not have shares, look at Ikea which has never offered shares to the public. For an example of a company which used to have shareholders and which bought out it’s shareholders, you could study Dell.

      1. Are shares valued at zero each effectively equivalent to zero shares?

        And going back to my other question considering apple’s cash hoard, could Apple continue its market success with all shares still available but each having zero value?

        1. Stock value in a company like Apple would not ever likely be zero. If you have a company that is FAILING…say Sears, even there, the value of shares will be above zero…people might be speculating there will be a buy out or a merger or liquidation. Buybacks make sense when the shares are not properly valued by the market. But as the price climbs, they lose some of their efficiency, from a market perspective.

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