Why Apple’s unit sales reporting doesn’t matter anymore

“Investors were disheartened by Apple Inc.’s announcement that it won’t provide unit sales numbers in earnings reports from this point on,” Jacob Sonenshine writes for TheStreet. “The stock fell more than 7% Friday afternoon, after Apple’s better-than-expected earnings report wasn’t enough to satisfy investors.”
“But it isn’t sales volumes that matter to Apple anymore,” Sonenshine writes. “Apple provides premium products, enabling it to lift prices, which lifts gross margins, and are justified by the services a user can enjoy on the device. And those services of course are likely to have significant upside, perpetuating the spin wheel.”
“Greg Portell, Lead Partner of Global Consumer Industries and Retail at A.t. Kearney Consulting is ‘”not really concerned about unit sales,’ he told TheStreet. The idea — especially in a slowing market for iPhones — is to ‘maximize profit from a slower growth base,’ Portell said,” Sonenshine writes. “Portell said the units numbers is simply not the important number to focus in on. ‘I don’t think it’s about confidence — it’s a misleading number in their mind,’ he said. The decision to stop reporting unit sales numbers focuses investor’s attention on services growth. ”
Read more in the full article here.
MacDailyNews Take: In effect, Apple is telling the analysts, “It’s the services, stupid.”
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