Apple has stuck out at Goldman Sachs in a relatively rare public report among the Wall Street companies.<\/p>\n\n\n\n
The dispute came after Goldman Sachs analyst Rod Hall\ncriticized Apple’s accounting methods for the new TV + product of the\ntechnology giant, saying in a research note that it could lead to lower gross\nmargins and profits.<\/p>\n\n\n\n
In response, Apple said it did “not expect the\nintroduction of Apple TV+, including the accounting treatment for the service,\nto have a material impact on our financial results.”<\/p>\n\n\n\n
A Goldman spokeswoman declined to comment. Apple also\ndeclined to comment on its relationship with Goldman beyond commenting on the\nnote.<\/p>\n\n\n\n
While the research departments of big banks on Wall Street\nhave Chinese walls separating them from other jobs, the rare public conflict is\na critical moment between the two companies.<\/p>\n\n\n\n
Goldman Sachs has subscribed more to Apple’s bond issues in\nthe past decade than any other investment bank, worth about $44 billion,\naccording to the financial data provider Refinitiv.<\/p>\n\n\n\n
Goldman Sachs also advised Apple on mergers and acquisitions\nrecently two months ago, directing it through a $1 billion deal to acquire the\nmajority of Intel’s smartphone modem business, according to Refinitiv.<\/p>\n\n\n\n
Just last month, the two worked giants together to launch\nthe company’s first credit card, the Apple Card.<\/p>\n\n\n\n
Each bank formally separates its divisions in equity\nresearch and investment bank departments because of laws in the early 20th\ncentury aimed at protecting the independence of equity analysts from investment\nbankers, who often cover the same different companies on agendas.<\/p>\n\n\n\n
Corporate clients typically respect the independence of the\nResearch Division. When they don’t, it gets a lot of attention.<\/p>\n\n\n\n
In May last year, Tesla CEO Elon Musk refused to answer\nanalysts’ questions about the company’s capital requirements, describing the\nquestions posed by the company as “boring” and “not cool”\nduring a conference to discuss Tesla’s performance.<\/p>\n\n\n\n
At the start of its fiscal year, Apple changed the values of\nits free services – such as Apple Maps – and transferred them to its services\nsector. This was previously under individual products.<\/p>\n\n\n\n
In the note, Goldman Sachs said that Apple is likely to\ntreat TV + subscriptions in a similar way, by accounting as a discounted\npackage of free service associated with the purchase of hardware. Hall said\nthat would lead to Apple investors see lower selling prices of iPhones and\nother Apple devices but faster growth in the company’s services sector.<\/p>\n\n\n\n
Many Apple investors have come to focus on growth in the\nservice sector as the global smartphone market stagnates, with Apple shares\nrising this year despite a decline in iPhone sales over a year.<\/p>\n","protected":false},"excerpt":{"rendered":"
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