Apple argues with Goldman over Apple+ accounting
Apple is not pleased with an analyst's comment from a long-time partner, investment banking firm Goldman Sachs.
The tech giant fired back at the Goldman analyst on Friday during a rare feud between the tech giant and the Wall Street bank which counts the tech company as a client according to reporting by Reuters.
The dispute followed a statement by Goldman Sachs analyst Rod Hall who was critical of Apple’s accounting for their new Apple+ streaming service. Hall’s research says that the way Apple’s handling of the new service may result in lower gross margins and profits.
Apple rebutted the remarks of the analyst, explaining they do ``not expect the introduction of Apple TV+, including the accounting treatment for the service, to have a material impact on our financial results.”
During their special event at the company headquarters in Cupertino, California earlier this week, Apple noted that the media giant would be offering their new streaming service, Apple+ to new product buyers for one year for free.
Hall noted that with this new way of accounting for things like this free service, investors may see lower average selling prices for iPhones and other Apple devices but faster growth in the services sector.
Neither company had anything further to comment about the awkward exchange between the two.
The public squabble is more embarrassing given the long history the two corporate behemoths share. Goldman has done extensive work with Apple over the years, underwriting more bond issuances in the last 10 years than any other financial institution, valued at more than $44 billion according to Refinitiv.
Goldman has also held Apple's hand through massive mergers, including a recent billion-dollar deal two months prior to this disagreement. Goldman helped Apple acquire a majority of Intel’s smartphone modem business as well as more recently helping to launch Apple’s new credit card, the Apple Card.
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This year Apple also adjusted how the company accounts the value and costs of free services like Apple Maps. It has moved the services away from the title of individual products.
Apple stock closed down almost 2% Friday in the midst of the disagreement.