The Apple Inc. (NASDAQ:AAPL) iPhone 7 is generating consumer interest that is close to that seen in iPhone 6 based on the analysis of Alphabet Inc (NASDAQ:GOOGL) Google search trends, two analysts at Longbow Research have said.
According to analysts Frank Carson and Shawn Harrison of Longbow, analysis of Google search trend can provide a glimpse of iPhone demand. They add that so far Google search volume for iPhone show that Apple is likely to post an increase in iPhone sales.
“Google search trends for the iPhone 7 remain well ahead of the iPhone 6s while tracking closer to the iPhone 6 launch. Google iPhone searches are correlated to iPhone shipments (R = 0.79) and predictive of future shipments (R2 = 0.63),”said the analysts in a statement.
The analysts have a BUY rating on Apple stock with a price estimate of $140. Part of the reason for the optimism in iPhone sales is that search interest in iPhone 7 isn’t far from the search interest in iPhone 6, which is billed as Apple’s largest product launch.
iPhone first weekend launch
Apple sold 10 million units of iPhone 6 on the launch weekend despite the product not being available in China immediately. As for iPhone 6S, Apple shipped 13 million at the launch weekend and that was largely because of the product launching in China almost simultaneously as it launched in the U.S.
Apple said it would not say how many iPhone 7 it sold at the launch weekend, claiming that the first weekend metric was no longer an important sales indicator.
— komocode (@komocode) September 25, 2016
Conflicting views of iPhone sales
The view held by Longbow analysts concerning consumer interest iPhone 7 seems to contradict the position of several analysts who recently commented on the products demand trend.
Analysts at Credit Suisse Group AG (ADR) (NYSE:CS) only recently said that iPhone sales in the December quarter would shrink 7% YoY. On their part, the analysts at Bernstein said that iPhone sales in the December quarter would pull back 5% YoY. At Barclays, the dropped Apple stock from their top pick list because they anticipate soft iPhone sales.
Part of the reason iPhone 7 has been a divisive factor among Apple analysts is that the device doesn’t feature any major upgrade compared to iPhone 6S that launched last year. As such, a section of analysts believe that some iPhone 6S might hold off upgrading their handsets until next year when a much improved iPhone 8 is expected to launch.
Apple stock rose 0.78% to close at $113.05 in the last session as investors digested the news of iPhone search trends on Google.
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