The company briefly lost its $US1 trillion valuation last month as shares dipped to a low of $US206.09. The sales of iPhone in Q4 2018 failed to meet the analysts' expectations but generated enough of revenue to refrain critics from being so vocal. Sales figures are a stable metric by which to measure the health of a company, and by concealing this information Apple is suggesting it's not doing as well as many thought.
The trend is indicating a colossal problem Apple has to deal with, and the company has chose to opt more damaging strategy to deal with - hide it!
The ASP (Average Selling Price) of iPhone soared to $793 from $618 a year ago. The company said it expects first-quarter revenue of $89 billion to $93 billion, slightly below Wall Street's expectations for the quarter.
The company sold 46.9 million iPhones in the quarter, generating revenue of $37.2 billion. Worldwide sales accounted for 61 percent of the total revenue, while services revenue touched an all-time high of $10 billion. 'Other Products, ' which includes Apple TV and the Apple Watch, was up 31 percent to $4.23 billion. Its revenue, however, rose 20 percent over the year-ago period to $62.9 billion, according to a company statement. Though on the plus side the firm will be disclosing gross margins for the product and services businesses which should help understand how Apple is evolving to more of a ecosystem approach versus a pure hardware company. That's a tough pill to swallow for Wall Street.
Keep in mind that these are units refurbished by Apple itself, which means you they're tested, certified, cleaned, given a new battery and outer shell, and come with a one-year warranty that you can extend with AppleCare+. Since the beginning of 2016, the sales of iPhone has remained stagnated. A closer look at the iPhone sales data reveals that it was only since the end of 2017 when ASP of iPhone started increasing like never before.
Despite record revenue results, Apple shares fell sharply by 7% over the news of the slow growth in iPhone shipments globally including India.
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The contribution of iPhone to the worldwide smartphone shipments has been constantly declining as well. From 18.3% share in Q4 2016, Apple's share has declined to 13.2% in Q3 2018. Apple needed to act, and act fast.
"We caution investors not to lose sight of the massive metamorphosis on the horizon at Apple being led by the services business", Ives wrote in a research report published Monday.
Other analysts said the outlook remains positive for Apple as it diversifies its revenue base with more services such as streaming music and Apple Pay, and moves toward the launch of a video service that could compete with Netflix.
"If you go to the market and you push your cart up to the cashier and she says, or he says, 'How many units you have in there?' It doesn't matter a lot how many units there are in there in terms of the overall value of what's in the cart".
Mac unit sales surged 42 percent from previous quarter.
Apple no longer wants people, journalists and analysts to focus on the declining sales of iPhone.