They are moving revenue from devices into services in order to show growth in services.
In some ways this is reasonable, but it certainly looks like they are cheating just a little bit.
They are moving revenue from devices into services in order to show growth in services.When Apple sells a product, they estimate value of free services (Maps, Siri) and that value has been reclassified under Services; cost to provide is also included in Services
In some ways this is reasonable, but it certainly looks like they are cheating just a little bit.
I see your point, but isn’t information technology all about “services?” What’s the difference between a telephone and a messenger? The telephone is hardware which performs the service of a messenger - much faster and thus interactive and more thorough communication (you hope).Kinda blurs the line . . .
When Apple sells a product, they estimate value of free services (Maps, Siri) and that value has been reclassified under Services; cost to provide is also included in Services They are moving revenue from devices into services in order to show growth in services. |
You’re misreading that line. There is no point in moving revenues from sales of, say the iPhone, iPad, or Mac product lines to services, as those are discrete events. A sale of the product is a one time event with the only on-going cost being potential warranty service of that device. The costs of providing all the components of those products are known, and even the warranty cost is an amortized, expected cost.
However, the individual users’ individual pattern of consumption of such built-in free apps such as Maps, Siri, iMessage, FindMyiDevice, Family Sharing, free iCloud space, Apple Mail, upgrade services, etc., that require unknown future demands on Apple’s data resources which do ensure both overhead and specific app related expenses to Apple to maintain, does vary between zero to heavy usage and doesn’t lend itself to properly being accounted to each individual item in a product line, but should more properly be accounted to the app’s service itself as an ongoing cost. I.e., some devices in a product line will never be used to access the GPS capabilities of Apple Maps, or take advantage of Apple’s Yelp license inherent in Maps for business data. This would be particularly true for all non-cellular iPads which are unlikely to be used for navigation as they lack a cellular radio. Others may, such as Mac desktops and laptops, not use Siri as frequently as mobile devices, even though they are capable of doing so. Why amortize the revenues or costs of those services to all such devices equally based on the one time, one price of the product sale when those services costs, but not the revenue, can go on for up to ten or more years, depending on the product.