It’s official: Wall Street has iPhone anxiety.
Apple delivered unexpectedly strong sales and profits for its latest quarter, but its shares tanked as a weak holiday forecast stoked worries that shoppers are hesitant to shell out for a new crop of extra-pricey iPhones.
The Silicon Valley juggernaut posted the strongest fiscal fourth-quarter results in its history — with $62.9 billion in revenue, handily beating the $61.4 billion analysts had forecast.
But Apple also revealed that it moved only 46.9 million iPhones, missing Wall Street’s forecast of 48.4 million and growing only 0.4 percent year-over-year.
Apple shares fell 7.1 percent in after-hours trading, to $206.46 — robbing Apple of its trillion-dollar valuation — leaving its market cap at $999.7 billion.
The concern is that the new iPhones — whose pricetags start at $999 and can stretch to more than $1,400 for a tricked-out XS Max — are scaring users into sticking with what they already have.
Apple execs went on the defensive during a Thursday earnings call, with financial chief Luca Maestri announcing that beginning this quarter, Apple will no longer break down unit sales for iPhones, iPads and Macs.
“The number of units sold in any 90-day period is not necessarily representative of the underlying strength of our business,” Maestri said. “If you look at our top competitors, they do not provide quarterly numbers.”
“When we believe that providing qualitative quantity of unit sales provides additional relevancy for investors, we will do so,” he added.
CEO Tim Cook went further, comparing Apple’s decision to a customer shopping at the supermarket and the cashier asking how many units are in the cart.
“It doesn’t matter how many units you have in there in terms of the overall value of what’s in the cart,” Cook said.
The change comes even as Apple blew past expectations for the average selling price of the iPhone, with the average handset running consumers $793 against an expectation of $729 — a 28 percent jump from last year.
The ASP jump was helped largely by Apple’s new iPhone XS and XS Max, which start at $999 and $1,099, respectively.
Cook said on the call that the new, more expensive phones were off to a “great start,” and said that it does not seem as if sales have been slowed by customers waiting for the release of the cheaper iPhone XR.
“In looking at the sales data for the XS and XS Max, there is not obvious evidence of that,” Cook said.
Elsewhere, Apple delivered soft holiday quarter guidance of $89 billion to $93 billion, whereas analysts were looking for $92.7 billion. It also beat profit expectations, with earnings per share of $2.91 against the forecasted $2.78.
Cook said during the call that he was not concerned about the trade showdown between the Trump administration and China.
“These trade relationships are big and complex. They clearly do need a level of focus and a level of updating and modernization,” he said. “I’m optimistic that the US and China can work these things out for the benefit of everyone.”
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