Apple's iPhone Data Goes The Way Of Its Headphone Jacks

Apple on Thursday said that it will stop reporting unit sales data for its iPhone, iPad and Mac computer products, the latter of which it has given out since 1998. Analysts and investors use the figures to calculate the average selling price of Apple’s devices and gauge the health of the company.

Reuters reports Apple said the data is less relevant to the strength of its business as customers bundle products, such as an iPhone paired with its wireless AirPods headphones, along with paid subscription services like Apple Music to listen to songs and iCloud storage for photos. Analysts were skeptical.

“Companies typically stop reporting metrics when the metrics are about to turn. This is not a good look for Apple,” said analyst Walter Piecyk from BTIG Research.

The move cost Apple dearly, helping to send shares down about 7 percent in after-hours trading. They later settled at $207.81, about 6.5 percent below their previous close.

But now, Apple will give cost-of-sales data for both its total product businesses and its total services business, which will let investors evaluate a gross margin for both. In the past, Apple gave only an overall gross margin figure for the company.

The new numbers are important for two reasons. First, they will show just how lucrative Apple’s hardware business really is. But more importantly, for the first time they give margin information on Apple’s services business, which reached $10 billion in its fiscal fourth quarter, up 17 percent.

Many of Apple’s fastest-growing businesses are subscription based, like its $9.99 a month Apple Music service. And investors tend to value subscription business through a combination of their revenue growth rate and margins - information that Apple investors will now have, said Tien Tzuo, chief executive of Zuora Inc, a company that helps subscription businesses track their finances.

Apple’s decision to make major changes to its reporting structure from the next quarter — and stop reporting the break-down on unit sales — is a “defining moment” in the company’s history, according to an analyst.

The iPhone-maker is making a transition from being a big hardware player to a services business, Jay Srivatsa, CEO of Future Wealth, told CNBC’s “Squawk Box ” on Friday. He explained that most of the tech giant’s hardware products in recent years have been “evolutionary” instead of “revolutionary.”

“Barring a major introduction of a new product, like an iPhone, in the next few years, we’re not going to see the company’s hardware revenues grow in any big fashion,” Srivatsa said. “It becomes a services business. I think part of the reason why they’re no longer going to split it up is because of that transition that the company’s going to go through.”

“I think this is a defining moment in the company’s history going forward,” he added.