Shares of Apple (AAPL) closed down nearly 2% today despite reporting first weekend sales of the iPhone that exceeded expectations by a wide margin. While analysts were expecting first weekend sales of the new iPhone 6s models to come in at about 12 million, this morning AAPL announced that actual sales came in at over 13 million. So why is the stock down? Part of the reason may be because overall interest in the new model is slightly weaker than it was with the iPhone 5 models.
The chart below was created using the neat Google Trends tool where you can gauge search activity for various terms on a historical basis. For this chart, the four terms we looked at were iPhone 5 (yellow), iPhone 5s (green), iPhone 6 (blue), and iPhone 6s (red). For the sake of comparison, the yellow (iPhone 5) and blue lines (iPhone 6) both represent new models, while the green (iPhone 5s) and red (iPhone 6s) lines correspond to refresh cycles. Looking at the chart, one trend that appears to be emerging is that search activity for the iPhone 6 peaked out slightly below search activity for the iPhone 5, and now with the iPhone 6s, search activity is currently below the peak in activity for the iPhone 5s. While we have yet to see search activity for the iPhone 6s turn lower, we would note that search activity for the prior three models all peaked in the month that the specific model was released. Therefore, unless trends in search activity deviate from the pattern we have seen with prior models, we are now seeing two straight launches of an iPhone model where search activity peaked below the peak level of search activity for the corresponding prior model.
Although Apple is quick to announce sales of new iPhones after their first weekend of sales, one number they have held close to the vest is sales of the Apple Watch. While only Apple knows the answer, we used Google Trends to see how search activity looked for this product as well (shown below). In the case of the Apple Watch, search activity saw an initial spike in September 2014 when Apple first unveiled the Watch and then quickly faded. When Apple released more specific details on the Watch in March of this year, search activity saw an even larger spike. Once the Watch actually went on sale, though, activity saw another bump, but this time it was much less. Since then, search activity has been slowly trending lower due to the lack of new news regarding the product.
Obviously, search activity is one of just many ways to gauge sentiment towards various consumer products, and admittedly it isn’t the most reliable. Over at our sibling firm Bespoke Market Intelligence (BMI), however, we use various survey methods to measure consumer activity and psychology towards different consumer products, including intent to purchase, prior purchase activity, overall sentiment, and many other. These methods are much, much more reliable than simply tracking search activity, and while this type of research has historically been out of reach to the average investor, BMI’s Consumer Pulse offering provides an affordable way to access this unique type of analysis. You can sign up for our Pulse service for free for 30-days at this link!