The Cost of the iPod

An anonymous reader writes "The New York Times is running an article today entitled Apple's Got a Secret. They discuss the cost behind making the ever-popular iPod ... a secret the company is keeping close to its chest. As a result of the company's signature secrecy and antiquated way of tracking profits, analysts are beginning to question the 'trust me' nature of buying Apple stock." From the article: "Geographic disclosure was adequate when pretty much all Apple sold were computers, Mr. Renck said. But the iPod has changed everything. Sales of Macintosh computers now trail those of iPod, which last year made up 46 percent of revenue. 'Apple clearly has its feet in two separate and distinct business models, namely computer manufacturing and software creation, and the consumer electronics industry,' Mr. Renck said."

Comments

Re:That was actually surprisingly good article

[TubeSteak]

Apple is a public company and has a duty to disclose to its' owners what the profit margins are on various products.

Not quite correct. The disclosure rules apply to portions of the business that generate more than 10% of a company's revenue.

From the marketwatch article

"Commenting on the issue, in a statement on current accounting and disclosure issues, the SEC staff has said it believes segment information should be broken out unless "separate reporting of segment information will not add significantly to an investor's understanding of an enterprise [because] its operating segments have characteristics so similar that they can be expected to have essentially the same future prospects."

Renck is complaining for one of two reasons:

1. He's an analyst & they cry when companies don't give them all the info they want.
2. Renck doesn't think that all Apple products "have essentially the same future prospects"

It's not really Renck's place to make that conclusion on Apple's behalf.

The determination is between Apple's CFO, Apple's auditing firm, and the SEC.