Apple Blames Currency Fluctuations and Uncertainty in Emerging Countries for Weak Holiday Sales Estimates

[Baymowe335]

I'm all for this. The investors don't need to know about unit sales. It's all about the Average Selling Price per unit because that is the only indicator of success. I would rather sell 1 phone that sells for $1B than to sell 1B phones for $1 each.

This is a winning strategy long term because revenue and profit is the most important factor instead of users to the growth of a company. Even if there is user drop off and services were to become stagnant, the positive changes in revenue and profit should clearly tell us that Apple will be vastly superior in all competing products and services in their sectors despite product price increases.

It hurts investors in the short term, but it's the right decision long term.

Analysts were far to focused on 51M iPhones versus "expectations" of 52M. They ignored a great quarter over "fear" the iPhone was slowing down. iPhone is mature. You're going to pay for it now because they have you and you want the device and associated services/support. It's business 101 and a great strategy.

Unit sales were originally reported because iPhone started from zero and the growth was tremendous. Apple now has a suite of services on their mature product lines and want investors to focus on the value, not widget sales.

It's sort of like dropping the iPhone price to $50 and saying, look how many we sold though! Imagine the unit sales growth then. In the end, this is about $$.
[doublepost=1541167502][/doublepost]

This is the iPhone XS Max 512GB in Brazil. It will cost R$9.999 (something like U$2.710). And they don't know why "Brazil was down somewhat compared to the previous year” like Tim said today.

Actually, they do know why. An overall emerging markets slowdown and intense currency headwinds because of a strong dollar.

Notice revenue was up 20% y/y, so there really wasn't a slowdown overall.
[doublepost=1541167817][/doublepost]

Why do you think Apple is no longer breaking out sales of each model of phone- because they are selling more older phones than newer phones.
Why is the price of the iPhone increasing but profit margin falling? - Selling less newer phones.
[doublepost=1541151086][/doublepost]
Its easy to lie.
[doublepost=1541151436][/doublepost]
Read between the lines and while anecdotal, there has never been so much complaining about Apple increasing prices.
Apple are not breaking out individual sales figures, they used to shout them from the roof tops.
I used to be such an Apple fan, and now see people echoing similar thoughts about Apple.
Apple are not doomed anytime soon but surely something has to change?
If there is any truth to peoples concerns, wouldn't you be concerned even just a little?
Its obvious Apple will do just fine in the short term, but all bets are off for the longer term.
[doublepost=1541151596][/doublepost]
You do realise that many of these "Apple haters" are not actual haters but Apple customers like myself, having a whinge?
On the subject of facts, why is Apple not breaking out the sales figures?
Why is the profit margin decreasing while device price had increased 62% in 6 years?

You again ignored my facts and went to completely anecdotal and "feeling" statements.

People can complain all they want, but the numbers say MORE people bought iPhones in FY2018 than in FY2017, after the price increases. FACT. Apple sold 218M iPhones versus 216M the prior year. So not only did people pay the new prices, MORE people bought iPhones. Their unit sales actually went UP, not down after price increases. Do you see that?

There is always something to worry about as an investor. I am looking at their quarter right now. The financial position of Apple is so strong, it's almost unfair. 20% revenue growth and EPS up 40% y/y. It's insane.

Why do I care about unit sales? They reported them before because they started from 0 and it was a great story. Now that the products have matured, the focus should more on services those devices offer, but analysts keep blasting Apple for 50M iPhones sold instead of 50.9M the analysts foretasted (not Apple).

I credit Apple for saying, screw it, no more unit sales. It's not like i can't see how well/poorly they are doing with revenue. If Apple dropped the price of the iPhone to $50, they'd sell a lot more phones and unit sales would look great. Is that really the goal? Obviously not.

 

[andipanda]

Fluctuations and whatnot aside, Apple could afford to take a hit or two in revenue to make pricing more fair across all markets. A USD799 product retailing for somewhere between 300 bucks more in Sweden? Go f- yourself Apple AND the Swedish sales tax both together.

I have no trouble ponying up the higher retail price, but a lot of people agree with me not doing so out of sheer principle, and instead opt for simply having someone bring over Apple products from overseas as personal carry-on luggage instead.

 

[baller1308]

Well ****'s expensive. Their entire lineup is increasing in price every new release.

 

[diego]

Really Apple? Weak sales aren't to do with your ridiculous pricing?

I know more and more people that are jumping ship. I have been an Apple user since I was born (my dad had an Apple II and original Mac - he just switched to Android), and I am considering it too. The ridiculous phone sizes they keep trying to push plus the insane prices are just not justified anymore. I want a nice, small, practical phone, not a $1600 CAD phablet in my pocket.

 

[Nuno Lopes]

So it had nothing to do with the rise in prices for the 5th year in a roll.

I am starting to worry if Apple it’s getting delusional but let’s see what happens.

 

[alent1234]

It hurts investors in the short term, but it's the right decision long term.

Analysts were far to focused on 51M iPhones versus "expectations" of 52M. They ignored a great quarter over "fear" the iPhone was slowing down. iPhone is mature. You're going to pay for it now because they have you and you want the device and associated services/support. It's business 101 and a great strategy.

Unit sales were originally reported because iPhone started from zero and the growth was tremendous. Apple now has a suite of services on their mature product lines and want investors to focus on the value, not widget sales.

It's sort of like dropping the iPhone price to $50 and saying, look how many we sold though! Imagine the unit sales growth then. In the end, this is about $$.
[doublepost=1541167502][/doublepost]
Actually, they do know why. An overall emerging markets slowdown and intense currency headwinds because of a strong dollar.

Notice revenue was up 20% y/y, so there really wasn't a slowdown overall.
[doublepost=1541167817][/doublepost]
You again ignored my facts and went to completely anecdotal and "feeling" statements.

People can complain all they want, but the numbers say MORE people bought iPhones in FY2018 than in FY2017, after the price increases. FACT. Apple sold 218M iPhones versus 216M the prior year. So not only did people pay the new prices, MORE people bought iPhones. Their unit sales actually went UP, not down after price increases. Do you see that?

There is always something to worry about as an investor. I am looking at their quarter right now. The financial position of Apple is so strong, it's almost unfair. 20% revenue growth and EPS up 40% y/y. It's insane.

Why do I care about unit sales? They reported them before because they started from 0 and it was a great story. Now that the products have matured, the focus should more on services those devices offer, but analysts keep blasting Apple for 50M iPhones sold instead of 50.9M the analysts foretasted (not Apple).

I credit Apple for saying, screw it, no more unit sales. It's not like i can't see how well/poorly they are doing with revenue. If Apple dropped the price of the iPhone to $50, they'd sell a lot more phones and unit sales would look great. Is that really the goal? Obviously not.

a lot of carriers in the USA were running BOGO deals if you open a new line

Since the new line requirement is still there, no reason to get a new phone this year since I can't get a BOGO

 

[satchmo]

Maestri also said that Apple has launched an "unprecedented number" of new products over the course of the last six weeks, and Apple has "some uncertainty" around supply/demand balance for some of these products. The launch timing of the new iPhones is also a factor, with the iPhone XR coming later than the XS and the XS Max. This had an effect on Apple's Q4 revenue and will also impact Q1.

Maybe if you don't wait years to update Macs...

 

[Krayzkat]

Lol I just realised that Apple said they aren’t going to reveal iPhone sales numbers in the future! Something to hide obviously?

Oh dear....

 

[dilbert99]

You again ignored my facts and went to completely anecdotal and "feeling" statements.

Feels like to me you are doing the same. You pick the facts that suit your story.

Apple are going gang busters but it’s not anecdotal that Apple have increased prices to cover selling more older phones.

Apple are selling more older phones, I’m assuming you agree with that fact?
I’m also assuming you agree with the fact that Apples margins are down from something like 40 odd percent down to 30 odd percent.
They are increasing the average selling price by increasing prices.

Take what I say with a pinch of salt because I agree I m no expert in this area.

 

[512ke]

Heck just charge a trillion dollars per iPhone and focus on revenue over volume.

 

[neil74]

What is clear is that goodwill towards apple is at an all time low and on principle alone I would kind of like to see them get a bloody nose.

I'm a long time apple user and was always ok with the apple tax based on what you got for that, it has just gone too far though now, I purchased the xs max and regret it and the fact that you cannot buy an apple laptop in the UK for less than £1199 is staggering imo. I recently had the need for a cheaper on the go laptop and purchased a surface, would have been unheard of a few years back but I really am not that far from ditching apple totally.

 

[MacRazySwe]

As much as I enjoy Apple products, it's really difficult to justify their prices here.

You can buy two, yes two(!) top of the line Android handsets (Galaxy S9, Huawei P20 Pro or similar) for the price of one iPhone XS.

The same goes for the laptop offerings as well.

 

[Baymowe335]

Feels like to me you are doing the same. You pick the facts that suit your story.

Apple are going gang busters but it’s not anecdotal that Apple have increased prices to cover selling more older phones.

Apple are selling more older phones, I’m assuming you agree with that fact?
I’m also assuming you agree with the fact that Apples margins are down from something like 40 odd percent down to 30 odd percent.
They are increasing the average selling price by increasing prices.

Take what I say with a pinch of salt because I agree I m no expert in this area.

I have posted many facts while you’ve literally posted none.

You’re attempting to now, but you’re sketchy on your facts. Gross margins have remained largely consistent around 38%. The iPhone X was the most popular phone since release, so when you say they are selling “more” older phones, you need to define that. With ASP at $793, they are certainly selling the MOST high end phones, or mathematically, the ASP can’t be $793.

 

[ntlman]

At least the Mini finally got an update, but they didn’t even bother to redesign the case after how many years?

Sadly, you're wrong. They did redesign the Mac Mini case... they removed the SD card slot!

 

[Rum_Becker]

Sadly, you're wrong. They did redesign the Mac Mini case... they removed the SD card slot!

And the IR

 

[lec0rsaire]

The same strong $ that they buy all their components in?

It depends if those savings make up for less sales.
[doublepost=1541185756][/doublepost]

Why is Apple not breaking down the figures? When the figures were impressive, Apple shouted them from the roof tops, now they want to hide them, hmmm.

Because analysts will point to units sold and write hundreds of articles saying how Apple is doomed. They even did it while sales were on the rise. I’ve been reading about how Apple is in trouble for a decade.
[doublepost=1541186081][/doublepost]

You can buy two, yes two(!) top of the line Android handsets (Galaxy S9, Huawei P20 Pro or similar) for the price of one iPhone XS.

And you can buy about 4-5 50” 4K Roku TVs for the price of an entry level LG OLED.

You can also buy two well equipped Honda Accords for the price of a base MB E300.

Premium/luxury goods simply cost more. Premium doesn’t mean best value.

 

[2GoldFish]

1) Apple is crushing competitors, period
2) Apple beat top and bottom lines, easily.
3) Apple posted 6% revenue growth on an $87B base, insane for that scale and almost always beats their own guidance.

My point is, the stock being punished is completely ignoring the reality of how insanely good this quarter was and how great Q1 will be. The numbers are staggering and as usual, Apple shareholders who buy more and hold will be rewarded longer term.

Analyst don't make recommendations based on the company's own guidance unfortunately.

Much of a company's valuation is based on future outlook. It is questionable whether the current strategy is sustainable in the long run.

 

[Baymowe335]

Analyst don't make recommendations based on the company's own guidance unfortunately.

Much of a company's valuation is based on future outlook. It is questionable whether the current strategy is sustainable in the long run.

The stock is selling off because the analysts say $93B isn’t good enough and they stopped reporting unit sales.

No one is concerned about the strategy...it’s killing it. Look at the data. People are mad about guidance and unit sales reporting.

Apple is one of the most manipulated stocks in the world.

 

[dilbert99]

I have posted many facts while you’ve literally posted none.

You’re attempting to now, but you’re sketchy on your facts. Gross margins have remained largely consistent around 38%. The iPhone X was the most popular phone since release, so when you say they are selling “more” older phones, you need to define that. With ASP at $793, they are certainly selling the MOST high end phones, or mathematically, the ASP can’t be $793.

Bear with me because my financial market knowledge is a bit sketchy...and I am willing to be corrected...

I had done a quick google that showed sometime over the last few years, Apple had a gross margin of between 35 to 45% (or something near those figures) and that it had fallen to something like the 38% you mention.

When I say more older phones I mean not the models released in the current cycle. So this year they released the xs/xr but continued to sell older phones like 5he 8 and so on.

I had also seen some charts on this site that broke down the number of each phone sold comparing on year to the next, might have been analyst figures, not sure, was the one with two horizontal stacked bar charts. It showed that Apple was mostly selling the older phones. I can’t remember the exact percentage and my memory might be playing tricks, but I thought it said Apple was mostly selling older phones and that the x wasn’t the main seller. Will have to google this when not on my iPad - it’s too awkward with my style of browsing.

Here are many ways the average selling price can go up. One is selling more of a higher priced product. The other is increasing prices. We know that Apple has increased the price of the top end phone by 62% since I bought an iPhone 5. So considering what I have put above that makes me think that it is the higher prices that is driving the adp and not the number of devices sold otherwise Apple would release the breakdown count.

If Apple doesn’t release the breakdown , how can we determine the cause of the increase is asp? Apple does mention thinks in its keynotes using vague terms such as our best ever, or exceeded our expectations

 

[Shanghaichica]

It depends if those savings make up for less sales.
[doublepost=1541185756][/doublepost]

Because analysts will point to units sold and write hundreds of articles saying how Apple is doomed. They even did it while sales were on the rise. I’ve been reading about how Apple is in trouble for a decade.
[doublepost=1541186081][/doublepost]

And you can buy about 4-5 50” 4K Roku TVs for the price of an entry level LG OLED.

You can also buy two well equipped Honda Accords for the price of a base MB E300.

Premium/luxury goods simply cost more. Premium doesn’t mean best value.

The S9 and P20 Pro are high end phones. They are not budget or mid range devices.

 

[dilbert99]

Apple is one of the most manipulated stocks in the world.

Just be glad you don’t frequent the Tesla forums.

I haven’t seen any particular level of Apple doom and gloom since the arrival of the iPhone 7 and since the removal of ports and the soldering of ram and ssd. Or perhaps this is related to me being more negative since then and noticing it morE but don’t think so. When I was a big Apple fan, I’m sure I would have noticed it more then. But then I’m no phsycologist.

 

[Baymowe335]

Bear with me because my financial market knowledge is a bit sketchy...and I am willing to be corrected...

I had done a quick google that showed sometime over the last few years, Apple had a gross margin of between 35 to 45% (or something near those figures) and that it had fallen to something like the 38% you mention.

When I say more older phones I mean not the models released in the current cycle. So this year they released the xs/xr but continued to sell older phones like 5he 8 and so on.

I had also seen some charts on this site that broke down the number of each phone sold comparing on year to the next, might have been analyst figures, not sure, was the one with two horizontal stacked bar charts. It showed that Apple was mostly selling the older phones. I can’t remember the exact percentage and my memory might be playing tricks, but I thought it said Apple was mostly selling older phones and that the x wasn’t the main seller. Will have to google this when not on my iPad - it’s too awkward with my style of browsing.

Here are many ways the average selling price can go up. One is selling more of a higher priced product. The other is increasing prices. We know that Apple has increased the price of the top end phone by 62% since I bought an iPhone 5. So considering what I have put above that makes me think that it is the higher prices that is driving the adp and not the number of devices sold otherwise Apple would release the breakdown count.

If Apple doesn’t release the breakdown , how can we determine the cause of the increase is asp? Apple does mention thinks in its keynotes using vague terms such as our best ever, or exceeded our expectations

We won’t get ASP either, by definition. If we get the revenue and ASP, we can do math and get units. We will still get iPhone, iPad and Mac revenue.

Again, units don’t matter. Apple is right. They could drop their prices and significantly increase unit sales, but that’s not the goal in business or at least for a company like Apple.

Apple is not “mostly selling older phones.” It’s mathematically impossible to sell mostly older phones and have a $793. Any charts you see with iPhone mix are made up and not reported by Apple.

Apple told us the ASP and that iPhone X was the most popular iPhone since release. You simply can’t get to their numbers “mostly selling older phones.” This is where you need to understand the company better to make statements.

 

[dilbert99]

...

I think your post above got garbled above because I messed up with a missing bracket in my post.
MacRumours is not compatible with safari on the ipad in terms of selecting text.
When I select a word and try to drag the handles, it jumps automatically to select a single letter. So assuming this is MacRumour wysiwyg scripting choice, either that or a combination of Safari and Macrumours and iPad sucking, my bet is on Macrumours because I don't have the issue on other sites, but would have to confirm that...

So I end up just holding finger on delete which is super frustrating.

 

[lec0rsaire]

The S9 and P20 Pro are high end phones. They are not budget or mid range devices.

High end in performance but not high end in price. Sure the early buyers will pay full price but they are discounted after a few months while the iPhone never is until the next one is released.

 

[Ebok]

The Canadian dollar is also down significantly so everything is as expensive as ever. My wages don't go up and down with the fluctuation in world currencies.

Still, I bought an iPad Pro earlier this year and his and hers Apple Watches and an iPhone XR recently. But my 2009 iMac which could use an upgrade will likely have to chug along for a little while longer.

iPad 11inch $799 USD - $999 in Canada
iPhone XR $799 USD- $1029 in Canada

iPad 12.9inch $999 in US - $1249 in Canada
iPhone XS $999 in US - $1379 in Canada