“While the saying goes that ‘No news is good news,’ in the case of Apple it turns out that ‘News about no news is bad news,’ Ben Thompson writes for Stratechery. “Apple has long been an exception in the smartphone space when it comes to reporting unit sales, so deciding not to is not that out of the ordinary; Apple, though, has always positioned itself as the extraordinary alternative — the best — and that approach paid off for years with sales numbers that were worth bragging about.”
“The reality, though, is that unit sales in isolation have indeed misrepresented Apple’s business for the last several years; specifically, they have underestimated it,” Thompson writes.
“Last week’s presentation… really highlighted how Today at Apple is perhaps the best way to understand the way Apple thinks about its growth opportunities going forward,” Thompson writes. “What is striking about Today at Apple is the scale of its ambition combined with its price: free. Of course that is not true in practice, because one needs an Apple device to realistically participate (and an Apple ID to even sign up), but that raises the question as to what Apple customers are paying for when they buy an Apple product? Apple’s point in highlighting Today at Apple is that customer’s are not simply buying an iPhone or an iPad or a Mac, but rather buying into an ongoing relationship with Apple.”
“Apple is in effect trying to build a social network in the real world, facilitated and controlled by Apple, and betting that customers will continue to pay to gain access,” Thompson writes. “To be perfectly clear, I am not arguing that Today at Apple is the answer to a saturated smartphone market or Apple reaching the limits of price increases. The company is clearly relying on “Services” revenue, which mostly means App Store revenue, a huge portion of which comes from in-app purchases for games, as well as a growing number of subscriptions, some provided by Apple (like Apple Music), but most by 3rd parties.”
Read more in the full article here.
MacDailyNews Take: How long will it take for this “no units sales numbers” rule to permeate Wall Street fully and will Apple have to provide some additional data in order to allow investors to better understand the company beyond the top and bottom lines? As Thompson says, Apple doesn’t really provide the data investors need if they want to be evaluated on their “Services” story. Active devices, which Apple sometimes provides, does not equal active users, which Apple has said they will not disclose.
Oh, well, we’ll still have wildly-disparate, totally-unverifiable unit sales estimates from third parties with questionable motives, we’re sure. Joy.
Investors don’t know what they want. As usual Apple will tell them what they want.