There’s an obvious reason for Apple’s decision to cease putting a figure on the number of iPhones it sells every three months: the numbers don’t look so good. 

For the final three months of Apple’s current financial year, it shifted 46.9m units, just 211,000 more than last year. In percentage terms that rounds down to zero. 

iPad sales, meanwhile, fell by 6 per cent, while the company moved 2 per cent less Macs. Ouch. 

But when it comes to revenues, things look very different. Apple both raised its prices and did better with top end phones. So that number climbed by 29 per cent. The corresponding figures for Macs and iPads were up 3 per cent, down 15 per cent respectively. 

All that being the case, why not focus everyone’s attention on the better looking number, which you have to report anyway?

You could argue, because analysts will run the numbers and come up with a pretty good guess as to iPhone sales in future quarters. So you just might as well get the real numbers out there as opposed to those based on informed speculation. 

But there is another reason for Apple’s move. As much as anything else it’s about changing the conversation; moving the company away from being one that is overwhelmingly judged by the quarterly sales of just one product, the growth of which (in common with the smartphone market generally) is slowing as people change phones less often. 

You can handle the latter issue by raising prices (as Apple has) but that will only take you so far and if you squeeze too hard your customer will rebel (Apple probably has an algorithm to tell it when it reaches that point). 

So where to find growth? That’s a key question for Apple, which saw its shares fall by 7 per cent at one point upon the results release, simply because its forecasts for future revenues weren’t sufficiently sunny for Wall Street. 

CEO Tim Cook’s solution is selling services, which have been growing nicely. Revenues were up 17 per cent, although the ‘Other Products’ line in the latest results statement - it includes headphones, Apple TV, the Apple Watch, HomePod speakers etc - was the star (31 per cent revenue increase). 

This is where it gets interesting. Cook has been a strong advocate for privacy, and better data protection and has called out Silicon Valley peers Google and Facebook for their aggressive mining of people’s personal data.

However, the point about selling services in the digital age is that it’s a lot easier to do if you don’t charge the consumer and instead fund your business via selling ads. 

There’s obvious a tension created between advocating for greater privacy and data rights on the one hand, and doing what’s in the best interest of your business by maximising the revenues on the other. 

An Apple running on services, rather than on iPhones, is going to have to find a way to navigate through that, although given the way the company has been going you wouldn’t put it past Cook to find a way. 

 

 

Comments

Share your thoughts and debate the big issues

Learn more
Please be respectful when making a comment and adhere to our Community Guidelines.
  • You may not agree with our views, or other users’, but please respond to them respectfully
  • Swearing, personal abuse, racism, sexism, homophobia and other discriminatory or inciteful language is not acceptable
  • Do not impersonate other users or reveal private information about third parties
  • We reserve the right to delete inappropriate posts and ban offending users without notification

You can find our Community Guidelines in full here.

  • Newest first
  • Oldest first
  • Most liked
  • Least liked
Loading comments...
Please be respectful when making a comment and adhere to our Community Guidelines.

Community Guidelines

  • You may not agree with our views, or other users’, but please respond to them respectfully
  • Swearing, personal abuse, racism, sexism, homophobia and other discriminatory or inciteful language is not acceptable
  • Do not impersonate other users or reveal private information about third parties
  • We reserve the right to delete inappropriate posts and ban offending users without notification

You can find our Community Guidelines in full here.

  • Newest first
  • Oldest first
  • Most liked
  • Least liked
Loading comments...