Getting Apple to think different about itself

[Bloomberg] [Fully Charged]( From [Bloomberg](   [FOLLOW US [Facebook Share]]( [Twitter Share]( [SUBSCRIBE [Subscribe]](  Hi, everyone. It's [Shira](mailto:sovide@bloomberg.net). If you see any Apple Inc. employees today, give them a sympathetic pat on the back. It's been a rocky stretch for Apple, at least in the hearts of investors. After five almost uninterrupted years as the world's most valuable public company, Apple this week [lost its crown]( to its old nemesis, Microsoft Corp., thanks to a 25 percent slump in Apple's stock price since an early October peak. Anxiety about economic weakness in some parts of the world and a deepening U.S.-China trade skirmish have weighed on Apple shares. So did a decision earlier this month to [stop disclosing]( how many iPhones, Mac computers and iPads it sells. That news -- coupled with reports about [soft production]( of new iPhones -- have made investors believe iPhone sales are heading south for good, and Apple is trying to hide its problems by trying not to tell anyone. Those fears are understandable. As smartphone shipments slow or decline across the industry, Apple just barely sold more iPhones in its fiscal year ended Sept. 30 than it did the prior year. It hasn't helped that Apple itself [doesn't discuss those industry trends](, and now seems to be trying to run from reality. A justification for ending the disclosures came from Luca Maestri, Apple's chief financial officer, who told analysts that the number of devices sold no longer represents an accurate picture of Apple's performance. In the last three years, Maestri said on a conference call, "there's no correlation" in any given quarter between device unit sales and Apple's revenue, net income or stock price. Permit me a rebuttal in the form of a chart: That, my friends, is quite a tight correlation. (The operating profit relationship is similar.) Yes, the coupling has loosened a bit recently. Apple's revenue growth shot up in the latest fiscal year even as iPhone unit sales barely budged, because of the higher-priced iPhone X model and its successor. To me, that makes it even more relevant to know the number of devices Apple sells. And how could there not be a tight correlation? IPhone sales generate about two-thirds of Apple's revenue each year, and likely an even larger share of its gross profit. No matter the rationale, if Apple stops revealing how many iPhones and other computing devices the company sells each quarter, it needs to add information that would help outsiders understand Apple's strategy. You can see what Apple is trying to do to offset a stagnant smartphone market. There are more than 1.3 billion iPhones, Macs and iPads in use around the world, and that built-in audience of Apple lovers is a huge financial opportunity. That's the [real genius of ancillary products]( like the Apple Watch, HomePod, AirPods, Apple Music and other Apple digital offerings. Those products and services are either unavailable or effectively pointless to people who don't already have an iPhone or another Apple gadget. But for people who do, those add-ons are useful, and they help Apple generate more revenue even if it can't convince everyone to buy a new device every couple of years. It is a sound strategy, but Apple needs to prove to investors that it's working. I -- like the tech writer [Ben Thompson]( -- am talking about Apple [offering a metric]( like ARPU, or average revenue per user, that companies such as Comcast Corp. and Facebook Inc. give to show their ability to grow revenue from their existing customer bases. This is what Apple is trying to do with its add-on hardware, software and services. Apple shouldn't tell investors to stop fixating on device sales without arming them with fresh data to [think different]( about the company. That means Apple needs to stop bragging about the popularity of its iPhone models, as it did [as recently as Wednesday](, and start talking about the value it provides to loyalists and the company's coffers by keeping people happy, entertained and spending more in Apple's ecosystem. --[Shira Ovide](  And here’s what you need to know in global technology news: [Here's the tale]( of how Taiwan Semiconductor Manufacturing Co. rose from anonymous computer chip factory to become one of the most powerful and disruptive forces in the technology industry.  Regulators in China [demanded major changes]( from Didi Chuxing, that country's leading ride-hailing company, after at least two highly publicized deaths of female passengers, allegedly at the hands of their Didi drivers. The company agreed to indefinitely suspend its lower-priced commuter service called Hitch.  Your next Uber driver [might be an undercover venture capitalist](.  At Amazon Web Services' annual conference, the business announced new ways to [cater to corporate customers]( that want to use cloud-computing functions but also keep control of some of their own technology functions. This area of hybrid technology has been Microsoft's sweet spot.  Speaking of Microsoft, it [won a $480 million contract]( to supply augmented reality technology to the U.S. Army.   Sponsored by Velocity Black Readers, the next generation of travel is here. GQ described it as “the coolest app we have ever seen." Velocity Black is the ultimate members club for the digital age, and our readers can jump the waitlist with a pre-approved application to this invitation-only service. Just tap [here](.   You received this message because you are subscribed to the Bloomberg Technology newsletter Fully Charged. 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