Looking at the search trend for ‘iPhone’ we note a consistent trend in search spikes the same time each year when Apple releases their newest product line in September. One effective way to analyze the trend would be to compare the year over year spikes in searches during the month of September to gauge online interest in the newest iPhones and how the stack up to years past. The search count for the current month have now surpassed September searches in both 2015 and 2013 and with several days of searches to transpire, the current month’s searches may also overtake September 2014 searches as well.
So what does this mean for Apple Inc. With more people searching for ‘iPhone’ the more likely we’ll see an increase in unit sales which has an effect on overall share price. Speaking of this, we note that the stock has been reversing from its medium term downward trend with the share price having jumped a little over 25% since June. This is interesting considering the iPhone 7s was not well received by the public with concerns that net technological advancements were slim. Globe and Mail article (Reference here) notes that the despite the reception, there were a number of stronger than anticipated indicators. While this could mean a lot of things, we agree nonetheless as search interest for the term ‘iPhone’ has recently spiked and is challenging YOY figures for nominal searches. This would suggest further that iPhone sales may see some upward momentum and while searches are not necessarily indicative of hard dollar transactions, we note that Apple has been pushing consumers to place orders online for the phone instead of walking into the store on release date. (Reference here)
The medium term trend for the stock has been down. This trend began sometime in May 2015 with the share price peaks and troughs falling progressively to lower levels. Given our review, it would appear that nominal search count has had some value in determining the downward trend, while not exactly a predictive indicator it does lend itself to confirming the movement in the share price. At the current time, many news outlets are bearish on the company’s prospects indicating that the new release is slim on new features in addition to the fact that it is entering a smartphone market that is saturated. While this may be true, it would appear that a lot of the judgement comes from the length of lineups waiting outside Apple stores, which in our opinion is not an entirely reliable indicator. Apple has come a long way since the first faithful were waiting days on end to pick up the first iPhone. Apple has taken many steps to alleviate these lineups and get product into the hands of consumers faster. Programs like the online pre-order or the Apple Upgrade Program are just a few of the steps taken which would naturally lend itself to smaller line ups. We maintain that consumers interest in the latest iPhone remains robust as judged by the surge in search interest and may lend itself to the current upward trend in Apple stock. This is an investment trend that looks promising.