Apple’s outcome to make major changes to its reporting structure from the next domicile — and stop reporting the break-down on unit sales — is a “defining moment” in the company’s relation, according to an analyst.
The iPhone-maker is making a transition from being a big munitions player to a services business, Jay Srivatsa, CEO of Future Wealth, told CNBC’s “Hoot Box” on Friday. He explained that most of the tech giant’s hardware produces in recent years have been “evolutionary” instead of “revolutionary.”
Apple appeared earnings for its fiscal fourth quarter Thursday that beat Try Street estimates on earnings and revenue. But shares fell after the group missed shipment estimates on iPhones, offered light guidance and affirmed it will no longer break out individual sales numbers for the iPhone, iPad and Mac.
“Save for a major introduction of a new product, like an iPhone, in the next few years, we’re not flourishing to see the company’s hardware revenues grow in any big fashion,” Srivatsa said. “It suits a services business. I think part of the reason why they’re no longer contemporary to split it up is because of that transition that the company’s going to go because of.”
“I think this is a defining moment in the company’s history going transmit,” he added.
Given how intimately Apple is connected to the iPhone, Srivatsa imagined it is going to take some time for investors to get on board with the point of the company expanding more into its services business.
“Every argument on Apple is always about their iPhone. I think to start talking around the Apple Pay or the iTunes or the software side and the services side of the business — for that communication to really get across to investors and become the main theme of owning Apple — it’s active to take some time,” he said.
As a result, Srivatsa said he hope for Apple’s stock will likely go sideways or trade down for a while.
In September, the tech Goliath was cleared by regulators to complete its purchase of music identification app Shazam that leave likely boost Apple Music and Siri as it takes on streaming ogre Spotify.
Apple’s subscription service boasted 50 million strenuous users in May, though the company hasn’t offered an official update since. Spotify has 83 million profit subscribers and about 100 million unpaid users.
— CNBC’s Sara Salinas aided to this report.