Apple Inc. (AAPL - Free Report) recently announced that it won’t be reporting sales numbers for iPhone, iPad, Mac or any of its hardware products in its quarterly reports. Demand for iPhone has been slowing for some time now. In its fiscal fourth quarter, iPhone sales barely grew from a year earlier.
Understandably, the company now wants to project itself as more of a services business. That said, many market analysts believe that Apple’s decision is in a move to hide the pain of slowing iPhone demand. This has also been taking a toll of Apple’s shares. Also, the tech sector, particularly FAANG stocks, comprising Facebook, Inc. (FB - Free Report) , Alphabet Inc. (GOOGL - Free Report) , Amazon.com Inc. (AMZN - Free Report) , Apple and Netflix Inc. (NFLX - Free Report) , has been suffering lately, taking a toll on markets.
Apple to Stop Reporting iPhone Sales Number
Last week, Apple on its earnings call announced that it would no longer report sales figures for iPhone, iPad, Mac and other hardware products in its quarterly reports. The announcement came alongside slowing iPhone unit sales. Apple said that in its fiscal fourth quarter, iPhone sales barely grew from the year-ago period, although the company launched a number of new devices.
The company sold 46.89 million iPhones during the quarter ended Sep 30. Following this, Apple’s shares slid 6.6% on Nov 2, marking its biggest single-day decline since January 2014. Naturally, Apple’s decision has raised questions in the mind of analysts. Slowing demand for iPhone has been a growing concern for Apple and many analysts believe that by no longer reporting iPhone sales figures, the company wants to hide the pain of slowing demand for iPhone.
Interestingly, Apple has time and again been praised for being one of the only tech companies to share sales numbers of its major products in each quarter. Apple this time said that reporting sales numbers in every quarter doesn’t present an appropriate picture of Apple’s performance.
However, slowing demand for iPhone hasn’t been hurting the company’s profits, as it has been hiking prices of its products. Apple posted revenues of $62.90 billion for the quarter ended September 2018, surpassing the Zacks Consensus Estimate by 2.29%. Also, Apple now wants to project itself as more of a services business. The company reported that revenues from services reached an all-time high of $10 billion, 17% higher than the year-ago period.
Tech Sector Continues to Suffer
Apple’s shares have taken a beating lately, with the situation worsening after the company gave a weak guidance and warned that sales for the all-important holiday quarter could likely miss expectations. Moreover, the decision to not report iPhone sales has further raised questions in the minds of analysts and investors.
However, tech stocks, particularly the FAANG group, have been one of the major drivers of the markets’ long rally. However, despite being the third-best performer on the S&P 500 index, tech stocks have had a rough 2018. And one of the major reasons behind this roller-coaster ride has been growing fears of trade war. Apple, Google, Netflix, Facebook and Amazon each carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Also, on Nov 5, Amazon’s shares tumbled after President Donald Trump said that the administration was looking into the antitrust violations committed by the company. Moreover, renewed concerns over user data privacy and security after breaches and vulnerabilities by the likes of Facebook and Google are also affecting tech companies. Facebook has been punished by investors time and again since it got embroiled in a data misuse scandal involving Cambridge Analytica.
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