“In 2014, Apple management surprised many by announcing they were not going to disclose Apple Watch unit sales once the product went on sale the following year. The decision was interpreted by many outsiders as Apple not thinking too highly of Watch’s prospects. As it turned out, nothing could have been further from the truth,” Neil Cybart writes for Above Avalon. “Apple’s Watch disclosure decision ended up foreshadowing management’s recent announcement that it will no longer disclose iPhone, iPad, or Mac unit sales. While a number of factors are behind Apple’s decision, the simplest explanation for the disclosure change is that Apple outgrew unit sales.”
“Apple management’s decision to no longer disclose unit sales makes plenty of sense. In recent years, it was becoming increasingly clear that unit sales weren’t as useful of a metric for analyzing Apple’s business now as it had been in the past,” Cybart writes. “The primary problem found with unit sales was how the data provided a limited look inside the Apple machine.”
Consider the following items:
• Despite iPhone unit sales being mostly flat for the past three years, Apple expanded the iPhone installed base by nearly 300M users.
• Despite annual iPad unit sales contracting by 40% from the sales peak in 2013, Apple was able to expand the iPad installed base by more than 120M users over the same time period.
• Despite Mac unit sales trending flat, Apple has been able to add approximately 10M new people to the Mac installed base each year.
“Unit sales became a crutch for financial analysts,” Cybart writes. “The quarterly numbers were telling us less about Apple’s business and were instead providing a false sense of security to outsiders. As it turned out, unit sales were painting a less attractive picture of Apple’s business fundamentals.”
Much more in the full article – highly recommended – here.
MacDailyNews Take: In the full article, Cybart distills Apple’s decisions to its essence, “Management is painting a new long-term blueprint for how it wants Wall Street to judge Apple: revenue and margins.”
How long this will take Wall Street to absorb is the question.
Pity the pro analysts who were repeated told by Apple to… stop relying on the unit sales crutch. Failing that, Apple simply pulled the crutch away. Walk on your own, Apple analysts! — MacDailyNews, November 2, 2018
Morgan Stanley: Apple’s services will grow to over $100 billion per year in 2023 – November 8, 2018
Apple’s focus is not iPhone market share, it’s on dominating the higher end of its markets – November 3, 2018
Apple’s iPhone just had its best year ever – November 3, 2018
Why Apple’s unit sales reporting doesn’t matter anymore – November 2, 2018
The ‘smart money’ shrugs off Apple’s decision to no longer disclose unit sales – November 2, 2018
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 beats Street with another record-breaking quarter – November 1, 2018