How to measure Apple’s success without unit sales

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A veteran analyst suggests six new metrics.

 

From a note by Gene Munster to Loup Ventures’ subscribers that landed on my desktop Thursday:

I’m guilty of falling into the unit trap. It took me 5 days to realize the company grew revenue 20% y/y and earnings 40% y/y in the Sept. 2018 quarter, despite Apple highlighting those data points 3 times on the earnings call…

We believe this is how Apple would have reported the Sep-18 quarter under the new reporting approach:

  • Grew revenue by 20% (highest rate in 3 years) and earnings by 41%. (We expect 11% revenue growth and 26% earnings growth in FY19).
  • Grew installed base at “double digits,” which now likely exceeds 1.4B devices.
  • Services grew at 17% despite a difficult y/y comp.
  • Returned $23.2B to investors.
  • Retail now has 506 locations, with 70k employees, up from 65k earlier in the year.
  • Saw Wearables growth of over 50%, compared to 60% in Jun-18, and 50% in Mar-18…

In a separate list, Munster suggested six data points Apple ought to release each quarter going forward:

  1. Earnings growth
  2. Revenue growth
  3. Hardware gross margin
  4. Services gross margin
  5. Installed base
  6. Revenue per user

My take: This is Munster’s wish list, which it seems to me falls considerably short of the version of the Sep-18 quarter he had just offered in his bullet points. The whole thing is a mystery, and until the company posts the new schedule Luca Maestri promised last week, it will linger like a bad odor over the market. I’ve been keeping an eye on the Investor Relations website. No sign as of Thursday morning.

See also: Apple’s new translucency: Watch CNBC freak (video)