Apple reassures investors about iPhone sales after stopping disclosure

Tim Cook, CEO of Apple, which has sent mixed signals
lately on how much investors should worry about how many devices
it’s selling.
AP

• Apple
  essentially told investors earlier this month that they
  shouldn’t worry any longer about how many iPhones, iPads, or
  Macs it sells.
• That worried investors a lot, and they sold off the company’s
  stock over fears of declining iPhone sales.
• Now Apple is saying investors shouldn’t worry because sales
  of its most recent model are doing just fine. 
• You’d might be confused about whether unit sales are
  important or not; we sure are.

OK, Apple, I’m confused.

First you tell me that I shouldn’t worry about how many iPhones
you’re selling. But now you’re telling me that — just in case I
was wondering, I guess — that your new iPhone XR is selling just
fine. In fact, it’s your best seller!

So, should I be concerned about how many iPhones you’re selling
or no? It’s all a bit befuddling.

When you
announced earlier this month you wouldn’t be disclosing unit
sales of your devices any more, I wasn’t happy. You’ve been
telling us how many iPhones and other gadgets you’ve sold each
quarter for as long as I can remember. The numbers help
investors, analysts, and us reporters better understand how your
business and the wider tech industry is evolving. With them, we
can figure things out like market share, the average price people
are paying for phones, and how the markets for tech products are
changing.

I get why you’re dropping reporting on unit sales 

But, hey, I get
your reasoning for dropping the disclosure. None of your
rivals report their unit sales numbers, so continuing to do it
arguably puts you at a competitive disadvantage. What’s more, as
your business has evolved, the number of iPhones you sell is no
longer directly correlated with your revenue or profits.

Thanks to increasing prices, you can sell the same number of
phones or even fewer of them and still make the same amount of
revenue and potentially post higher profits. And with your
services business becoming increasingly important, the amount of
money you get from your customers is determined by much more than
just each device you sell them.

So, I appreciate your reasoning. I mean, I wish you would replace
the unit sales numbers with something that might give us similar
— but more relevant — insights about the performance of your
business. It would be great, say, if you would disclose something
like an annual revenue per user number like other companies in
subscription and services businesses. That would be helpful. But
I understand — you want us to clear our minds of unit sales.

But, wait, why are you talking about unit sales again?

Or at least I thought I did until I saw
a CNET article on Wednesday. In it, one of your top
executives — Vice President of Product Marketing Greg Joswiak —
came out and talked about unit sales. The new XR is Apple’s best
selling iPhone and has been since it launched last month, he
said. It’s outselling the company’s two flagship phones, the XS
and XS Max, he said.
He also gave Reuters an “interview” to provide the same sound
bite.

OK, sure, Joswiak didn’t give any hard and fast numbers. So we
don’t know just how many XRs or XSs Apple’s selling. But I
thought we weren’t supposed to be worrying about how many you’re
selling at all?

Are you saying I actually should? Or is this your way of
acknowledging that many of us out here still do and this is your
attempt to reassure us that everything’s fine?

Maybe you’re just nervous — just like your investors

You didn’t respond to my inquiry about this, so I don’t know for
sure. But I could understand it if that’s the case. I mean, I’d
get nervous too if my stock had fallen so far so fast as yours
has. Seeing hundreds of millions of dollars in market value
evaporate in less than a month might have me rethinking my
convictions too.

Clearly, despite your assurances that unit sales don’t really
matter all that much, investors are nervous about them. And can
you blame them? According to the Wall Street Journal,
you asked your manufacturers last month to cut the number of XRs
they’re making by a third before coming back to them this
month and asking them to cut production again. Meanwhile,
according to Bloomberg, Foxconn, your biggest manufacturing
partner,
is cutting costs and warning of a tough year ahead.

Even one of your most bullish backers on Wall Street is saying
that
sales of your new phones are “clear disappointment.”

Read this:

Investors focused on Apple’s disappointing iPhone sales are
missing the company’s hidden goldmine

So, I get that you might feel a need to reassure investors that
everything’s really OK, that the XR is doing peachy. I just wish
you could make up your mind and clear things up for the rest of
us. Should we be worried about how many iPhones you’re selling or
should we not?

Because from the looks of things, you sure are.

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