The ‘smart money’ shrugs off Apple’s decision to no longer disclose unit sales

“Momentum, or momo, money flows were positive and smart money flows were neutral going into Apple’s earnings. The momo crowd is driven mostly by share-price momentum,” Nigam Arora writes for MarketWatch. “After the earnings, momo money flows became negative and became extremely negative when Apple announced it wouldn’t release unit sales numbers going forward. Those money flows have remained negative.”

“‘Smart money’ flows in Apple have remained neutral even after Apple’s shocking announcement,” Arora writes. “The smart money represents sophisticated investors who act based on deep analysis and better information.”

“The fact that Apple has decided not to disclose iPhone unit sales going forward indicates that Apple expects iPhone unit sales to decline,” Arora writes. “This eventuality has been obvious to the smart money for a long time, and that is why smart money flows have not changed.”

Read more in the full article here.

MacDailyNews Take: 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.

SEE ALSO:
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

8 Comments

    1. Reporting units is a shallow, short term indicator of the company’s progress. The analyst media focus is too shallow to appreciate Apples long term strategies. Tim cook tried to explain it last earnings call, but the media just don’t get it.

      When Apple keeps improving the quality and durability of their phones, and has prolonged their life with a cheap battery replacement policy, smart battery cases, and low energy using processors, and constant OS upgrades, the slow down in the replacement cycle APPEARS to hurt sales. Sales may stay flat or even decline a little, even as the installed base continues to grow. Analysts then panic! Apple doesn’t, because long term, the base grows and customer loyalty continues to increase, as phone after phone the customer receives value, through resale or passing down in the family, for long after they paid for that top class phone.
      This growing installed base is smarter and wealthier than the short sited, cash strapped Android crew, (who don’t worry about privacy as they have little to lose) and they buy subscriptions, cloud space, accessories, and satellite products because they are confident they will remain with Apple and continue to receive LONG TERM value.

      I see the ending of the cheap battery replacement program in December causing an increase in replacements gradually the following years. I see the increasing adoption of the Apple watch as health sensors improve, and Apple’s lead in smaller and more efficient chips maintains their superiority. I see Apple’s patience and reliance on producing longer lasting, higher value products as an intelligent LONG TERM strategy, and not a negative, even though the “analysts” panic at the prospect unit sales may fluctuate.

      1. Another factor is that Apple will now be keeping private the breakdown between cheaper iPhones and more expensive models. That strategic data is valuable intellectual property that Apple shouldn’t have to share with Samsung and its ilk.

  1. 2 cent thoughts:

    Positives:

    The sell off is overdone.
    (Fantasy : If everybody sells their shares and you hold the last share remaining, you will own a company earning $60-100 billion every three months… )
    The P.E of Apple is already so low (not bloated like it’s tech peers like Amazon) , the earnings so big feeding massive buybacks so that there’s a ‘safey net’ for Apple stock.

    Did analysts miss that Apple just INCREASED their earnings by 41% ?
    As usual they didn’t get Apple product launch difference this year (like the didn’t get Big iPhone 6 comparison or get the ‘less one week’ quarters in the past) . The XS and Max came out earlier so they boosted Average Selling Price and earnings but as the XR is later the UNIT numbers are SLIGHTLY light . XR will boost unit numbers later.

    The cautious guidance for next quarter was T.C explained the XS and Max were released earlier (see above, hence the huge big 41% earnings jump this quarter) plus Macro economic (like trade war) and the $2 billion in exchange rate issue.

    If the $2 b was added Apple’s guidance would have hit close to analysts own predictions. Even analysts who said they did factor in exchange rate issues admitted they didn’t realize a such a big number. The small difference between Apple guidance and analyst predictions , a couple billion out of 90 b or so caused overblown ‘doom’ predictions

    Look at the energy of Apple Staff at the Mac iPad launch two days before, they don’t look like worried ‘sky is going to fall’ people.

    Apple’s massive earning has allowed it to make ground breaking tech like the ‘A’ series chip , software innovations like camera image processing etc that will allow it to keep pulling ahead of competitors. Things which analysts (who are not nerds) don’t get.

    The Negatives:

    As I’ve criticized before over the years, I think Apple:
    focused too much on iPhone and iPad and didn’t push new products hard enough or take care of the Mac.

    Years back iPad sales were skyrocketing to elicit comments from Cook that he ‘hadn’t seen anything like it’ and ‘we don’t need PCs’ etc. That was before iPad sales fell off a cliff in 2014 and is about 60% now from peak numbers.

    Mac was neglected but today it is (contrary to critics) STILL Apple’s number two hardware earner, making $7 billion last quarter, larger than iPad $4 b (as usual) and still bigger than Other Products $4 B which includes Watch, Beats, AirPods, HomePod etc.

    Apple didn’t even bother to run a single Mac Ad campaign targeting fiasco Win 8 all the years it was out ! There are practically no Mac ads at all until recently. Imagine NOT ADVERTISING your SECOND BIGGEST product ! (for years I said this was insane).

    My post is too long already to go full on on a Mac spiel. Mac is sub 10% sales marketshare now and there’s plenty of room to grab. Hopefully Apple as seen in the recent event is waking up the possibilities of Mac.

    Apple needs to double down on PRODUCT focus. Remember all the crazy effort put into the Campus. Ive was in charge. There were designer furniture, ceiling tiles, a fruit farm, one and half year to make door handles. Ive even pulled PRODUCT CASING designers to solve the ‘greenish tint’ issue of the campus glass, apparently a ‘scientific American’ type effort that elicited long articles in the tech press. After massive work they got the glass clear…

    I would rather they spent the time on Mac and new products.

    , count the products Jobs came out with in about 10 years with fraction of the budget available today, all we got since iPhone is the Watch and accessories like AirPods and HomePod.

    Maybe the drop in share price will give Cook and the SVPs a big nudge to get back to the main issue : products.

    1. I like the fantasy of everybody but me selling all of their shares but you seem to have forgotten that for somebody to sell a share, somebody else has to buy it.

      1. not if apple does the buybacks which it is doing now by millions a’s reduces the share count. i think theorectically the remaining shares can be very low in value — as share price is based on the last price offered — but as the share count drops in theory you own more of the company minus liabilities like debt, employee obligations like pensions. Of course the cheaper the share price the faster Apple can buy back the shares

  2. I’m already over Apple share price dropping 7% and see it as an opportunity for Apple to buy back more shares and Warren Buffett buying more shares. It’s nice if Apple can maintain its trillion-dollar valuation because it will show Apple is still a solid company. I’ll continue to get my Apple dividends which takes my mind off the stock drop. I think it’s OK if Apple reports weak guidance for the next quarter as there’s no need in creating a risk of higher expectations.

    I’m just tired of the FANG stocks consistently outperforming Apple. Apple always seems to drop quite a lot after a solid run while the FANG stocks remain strong. I thought Apple was going to hold around $220 to $230 but it simply wasn’t possible. I was hoping Apple was going to become invincible like the FANG stocks but I should have known better. Even Microsoft is less volatile than Apple thanks to its cloud business. Too bad Apple decided to pass on the cloud and its unlimited growth potential. Apple is doing OK so I shouldn’t have a reason to complain. Better luck to fellow shareholders at the next financial quarter.

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