“It has been almost a week since technology giant Apple reported its fiscal fourth quarter results, and shares dropped on the news. While the company beat for the September quarter, guidance was light for the holiday period and the street was spooked by a major reporting change that was disclosed on the call,” Bill Maurer writes for Seeking Alpha. “While Apple might be doing the right thing in the long term, it couldn’t win the perception game in the short term.”
“If you read through the conference call where management made this ending unit sales reporting announcement out of the blue, you do understand why the change was made,” Maurer writes. “At the moment, total revenues for a product category are more important than unit sales, as average selling prices are soaring due to more expensive models… That’s one reason why management said guidance was a little softer than it could have been, because the more expensive models already sold a bit in fiscal Q4”
“Normally, I don’t think this reporting change would have gotten the coverage it did. However, when you combine this piece of news with management giving guidance that was softer than expected, it does raise some questions. Is Apple concerned that unit sales, particularly for the iPhone, are topping out thanks to higher prices? Had guidance been in line or above expectations, there wouldn’t have been that much concern here. But when you announce something like this along with weak guidance, people get spooked,” Maurer writes. “Unfortunately, Apple lost the perception game here, so we’ll have to see how the street responds in the long run.”
Read more in the full article here.
MacDailyNews Take: We agree that Apple could have done this when they had strong guidance up their sleeve, but we bet the negative knee-jerk reaction would have been strong regardless. After all, the Church of Market Share – packed full of lazy and/or ignorant analysts – ceases to exist without regular, verifiable unit sales figures. That’s a good thing. Any pain AAPL has to suffer is worth removing the increasingly meaningless unit share albatross. Apple will simply step up their buyback program at a deep discount for a stock that’s been undervalued basically forever; certainly since Steve Jobs returned. Apple ending unit sales reporting is a win-win.
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