Currently, apple is rethinking on another appropriate way in which it can determine its success and profitability. This is because the Apple has reached its peak.
There is no any other phone company with bulky revenues and large profits from its popular products like Apple- the iPhone company. However, you cannot compare the 2018 and 2019 status of the iPhone company with its status at the time of the hyper growth stage that started many years ago.
Now, the company has come up with a new story which is compelling and it is indirectly tied to the number of people who purchase new iPhone models.
For the last several quarters, the sale for the new Apple products such as iPhones and tablets have been relatively flat. On Thursday, Apple claimed that in the last quarter, they were able to sell about 46.89 million iPhones, and by estimation, this was just an increment of 0.4 percent of the year-ago quarter.
Apple also said that it would not release more report about the iPhone sales in future. This really hit the investors with a big surprise. The statement which was made by the apple about the sales report on the iPhones greatly frustrated the investors as the company’s shares also went down to almost 7 percent in the Thursday evening.
Analyst raised the alarm. On Friday morning, the stock was downgraded by the Bank of America, Merrill Lynch. “Apple has something to hide from the investors by no longer willing to disclose the iPhone sales”, claimed Jefferies analyst, Timothy O’shea.
But the other side of the story has it that the iPhone business is becoming more profitable than ever hence, the company is not willing to reveal some information regarding their business. For example, new iPhone models such as iPhone XS are more powerful and also very expensive as the cheapest prices can start at $999.
There is also an increase of 28 percent in the average selling price (ASP) of the iPhone from the year-ago quarter. This is enough evidence that customers are ready to pay more money for an iPhone than they used to pay just a couple of year ago. Apple has never found the iPhone to be more profitable as it is as per now.
On Thursday, during Apple’s earning call, CFO Lucas Maestri said that iPhone unit sales figures should not be used in explaining how well the business is doing, because those figures are no longer the best ways to do so.
“iPhone sales are not necessarily representative of the underlying strength of our business”, Added Maestri. “A unit sale is not that relevant for the company today as it were in the past, given our breadth of our portfolio and the wider sales price dispersion within any given product line.”
Beyond hardware, Apple is expected to elaborate more on its services business which generated for the company amount worth $9.98 billion during the quarter.