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Apple has huge revenues, profit margins that are the envy of businesses around the world and a stock market value of $ 1 trillion.
Despite these obvious strengths, Apple on Thursday announced to investors that it would stop publishing figures critical to understanding the performance of its most important business: the sale of iPhones.
The company announced that it would no longer disclose the number of iPhones, iPads and Macs that it was selling each quarter. Without this data, investors will not be able to track the average selling price of iPhones, a crucial figure for determining whether consumers are reluctant to pay for higher-priced Apple phones.
This decision, combined with Apple's disappointing sales forecasts for the quarter, helped drive the company's stock down by more than 7% on Friday, a move that weighed on the broader stock market.
Apple's decision to reduce its disclosures should also be a shock for all investors.
For much of the year, investors seemed to ignore the warning signs that led to large tech companies and pushed their stock higher. Their fall last month – Netflix shares fell by 26% from their peak and Amazon by 19% – probably made investors more aware of the issues facing these companies in their core businesses.
But Apple's decision to make its iPhone sales less transparent could underline the seriousness of these challenges. "A sudden loss of disclosure suggests a weakness beyond a quarter," wrote Jeffrey Kvaal, an analyst at Nomura, in a research note.
IPhone sales have stagnated in recent years. As a result, Apple has increased its prices to boost its iPhone revenue. The average sale price of an iPhone was $ 793 during the three months prior to September, an increase of 28% over the previous year. Without the count of phones sold, it would not be possible to calculate the average selling price, and third parties will have more difficulty in assessing the sensitivity of consumers to the price of iPhones. "We believe unit volumes and prices of A.S.P. reflect loyalty and consumer satisfaction," Kvaal wrote in his note, referring to average selling prices.
Selling iPhones cheaply to a relatively small share of the global smartphone market is at the heart of Apple's strategy. With less data, investors will probably have trouble knowing whether this approach succeeds or not.
Other major technology companies have deleted data from their regular financial reports. And some simply do not disclose numbers that might be useful in determining trends in their activities. Twitter, for example, does not provide the total number of daily average users, a number given by Facebook.
Facebook does not disclose Instagram revenue, a figure that would help investors understand the appeal of each platform for advertisers.
Apple's chief financial officer, Luca Maestri, said Thursday that deleting the data would not affect investors' understanding of the company's performance. In the last three years, he said, there was no correlation between the price and the number of phones sold. Apple has announced the release of new information, including the cost of sales of its two main industries, called products (selling items like the iPhone) and services (subscriptions to Apple music, for example).
But the new information may not compensate for what has been removed. IPhone sales accounted for almost three-fifths of the company's sales in the last quarter. And the decision to stop providing iPhone sales comes at a crucial time for smartphones. Smartphone sales in the richest countries are slowing, with consumers keeping their phones longer. While sales continue to rise in emerging markets, such as India, the handsets that dominate these markets are cheaper. As a result, as sales mix moves in these countries, it could reduce profit margins.
"I think we're at the top of the smartphone," said Kevin Dennean, technology strategist at UBS Global Wealth Management.
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