Early indicator puts Cook’s ‘iPad Christmas’ prediction at risk

Gregg Keizer
1 November, 2013
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While Apple CEO Tim Cook last week said that it would be an ‘iPad Christmas’ this year for his company, one early demand indicator signals a less than stellar fourth quarter.

According to mobile technology analyst Sameer Singh, who publishes his analyses on Tech-Thoughts, October demand for the new iPads was roughly 25 percent lower than the same month last year, and about equal to October 2011′s.

Singh uses, as do a few other analysts, Google Trends as a future predictor of device demand. Google Trends mines the Mountain View company’s search data to see how often specific search terms are requested relative to the total volume of searches.

The idea behind Google Trends as a sales signal is that people planning on buying a device search for information about that device before purchasing.

There has been a strong correlation between iPad sales and Google Trends’ results for searches of terms like ‘iPad’ and ‘iPad mini’, especially in the last year, said Singh. Google Trends, for example, predicted sales of 13.5 million iPads for the quarter that ended 30 September; on Monday, Apple said it had sold 14.1 million, a difference of about 600,000 units, or about four percent.

While Singh declined to forecast fourth-quarter iPad sales based on the early Google Trends data, he did note that the latter was lower than in October 2012 – the month Apple unveiled the fourth-generation iPad and the then-new iPad mini – and about the same as October 2011, seven months after the launch of that year’s model, the iPad 2.

“October demand for the iPad seems to about 25 percent lower than last year and roughly comparable to 2011,” Singh wrote. “Of course, this is only one piece of the puzzle and Christmas demand could always be higher.”

If Google Trends is an accurate indicator, iPad sales in the fourth quarter would be between 15.4 million (Q4 2011′s total) and 17.2 million (25 percent less than Q4 2012′s sales).

Those numbers are far below projections touted by Wall Street analysts. Brian White of Cantor Fitzgerald and Co, for example, has pegged iPad sales for the fourth quarter at 24.5 million, or up seven percent year-over-year. His take was partially based on the inclusion of China for the first time in the initial sales wave, as well as a 24 percent expansion of the number of countries in the 1 November roll-out, from 34 countries in 2012 to 42 this year.

Brian Marshall of the ISI Group was even more bullish, with a 25 million iPad forecast for the fourth quarter, up nine percent compared to the same period in 2012.

So was Cook.

During the third-quarter earnings calls with analysts and reporters on Monday, Cook was, not surprisingly, very upbeat. “I think all of these… products are going to do really well. I think it’s going to be an iPad Christmas,” Cook said.

Apple will start selling the iPad Air today.

by Gregg Keizer, Computerworld

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