Apple (AAPL) shares plunged 7% on Thursday during after-market trading after the company reported fourth quarter results. Even though it reported record earnings and strong revenue growth, thanks to the increase in iPhone prices, investors were worried over slowing unit sales and weak guidance.
Adding to the investor concerns, the company added during the earnings conference call that it would stop publishing unit sales figures from the next quarter – hinting it doesn’t want to disclose the bad numbers. For the full earnings call transcript, click here.
Key comments from Apple Q4 earnings conference call
# Apple reported revenue records for Apple Music, AppleCare, App Store, Apple Pay, and cloud services in Q4
# Transaction volume tripled in Apple Pay in Q4
# Mac reported a quarterly record in revenues in Q4, primarily helped by MacBook Pro
# Apple currently has over 330 million paid subscriptions on its platform, 50% higher than last year
# Starting December quarter, Apple will start reporting revenue as well as the cost of sales for both total products and total services.
# The iPhone maker is adopting the FASB’s new standard for revenue recognition. As part of this, the revenue corresponding to the amortization of the deferred value of bundled services such as Maps, Siri, and free iCloud services will now be reported in services revenue. It was earlier reported in product revenue.
# Apple we will no longer be providing unit sales data for iPhone, iPad and Mac. “A unit of sale is less relevant for us today than it was in the past, given the breadth of our portfolio and the wider sales price dispersion within any given product line,” CFO Luca Maestri said.
# From next quarter, Other Products category will be renamed to Wearables, Home, and Accessories to provide a more accurate description of the items that are included in this product category.
# During the upcoming holiday quarter, Apple faces a few headwinds including those from foreign exchange, uncertainty around supply and demand balance due to product revamping and macroeconomic impacts in emerging markets.
# Tim Cook: The emerging markets that we’re seeing pressure in are markets like Turkey, India, Brazil, Russia. Our business in India in Q4 was flat. Brazil was down somewhat compared to the previous year. Our business in China was very strong last quarter. We grew 16%, which we’re very happy with. iPhone, in particular, was very strong, very strong double-digit growth there.
# Tim Cook: The App Store in China, we have seen a slowdown or a moratorium, to be more accurate, on new game approvals. There is a new regulatory setup in China, and there things are not moving the way they were moving previously.
# Stating that its smartphone competitors also do not offer unit sales figures, Apple said it would continue to provide qualitative commentary on the same.
# With the little data that is available at the moment, Apple said people are not waiting for the XR, rather they are buying the XS and XS Max
# Apple said benefits from commodities, particularly the price decline in NAND will partly be offset by foreign exchange headwinds.
# Apple said it is constantly holding discussions with the Indian Government and hopes to set up stores in the country soon