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Why Apple CEO Tim Cook Will Be Getting the Last Laugh

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Tough day at the office for Tim Cook on Thursday.

Just two days earlier, the Apple CEO looked to be thoroughly enjoying himself on stage at the Brooklyn Academy of Music, introducing a bevy of hot new products and giving Lana Del Rey a big hug. He looked relaxed and in command in his crisp white oxford and quarter zip blue pullover, flashing a victory sign to photographers as he mingled with journalists and some celebs later in Apple’s demo area.

But Thursday was Apple earnings day—and what a frustrating day it must have been for Cook, Apple CFO Luca Maestri, and the rest of the team.

For one, Wall Street just doesn’t seem to appreciate how Apple is coping with the global slowdown in smartphone sales. Raising prices on hardware while pushing further into all kinds of cash-generating services combined to help Apple report a healthy 20% gain in revenue to almost $63 billion. (The $10 billion increase over last year’s quarter alone would qualify as a Fortune 300 company.) And that was with virtually zero growth in the number of iPhones sold compared to last year. But investors focused on the weak number of iPhones sold, not that the average selling price per phone had jumped to $793 from $618, and immediately sent Apple’s share down about 3% in aftermarket trading.

Which brings us to the second, even bigger source of frustration. Apple decided to make a couple of big changes to the information it discloses every quarter. And one made investors even more unhappy.

First, it will start revealing the cost of providing all those services (like app sales, cloud storage, and mobile payments). Analysts will be able to compare the cost to the revenue brought in (which Apple already discloses) and calculate a gross profit margin. Second, and more controversial, it will stop disclosing how many iPhones, iPads, and Mac computers it sells every quarter. Thus, analysts will no longer be able to see trends in iPhone unit sales, calculate average selling prices, or discern other key trends. Apple shares gapped down to a 7.4% loss, briefly sending the company’s stock market value below $1 trillion, before slightly recovering. (As I write this, Apple shares are off 5% on Friday morning, putting it just over the $1 trillion mark.)

Quote machine and analyst Walt Piecyk at BTIG Research cut to the chase. “Speculation on what is occurring in Apple’s business segments will fill the void created by the absence of information,” he wrote. “The uncertainty that speculation breeds is rarely positive for stocks.”

After another analyst got a little pushy about the change on Cook and Maestri’s Thursday evening conference call and the two execs responded, the company ended the Q&A session (though it had run for the usual hour length).

But I’d bet it’s Cook who will have the last laugh. Remember how Amazon’s (AMZN) stock price exploded upwards in 2015 after the company began disclosing not just its revenue from cloud services, but its stronger-than-expected profits, too? That may be the headline in three months when Apple (AAPL) first discloses the profits of its services business, which some currently assume isn’t all that profitable, or at least less so than $1,000 iPhones. Stand by for the answer.

(Updated on November 2 to correct the spelling of Luca Maestri’s name.)