Apple just issued a warning on iPhone sales, but Google Trends saw problems years ago

VCG/VCG via Getty ImagesCEO Tim Cook attends China Development Forum (CDF) 2018 at the Diaoyutai State Guesthouse on March 24, 2018 in Beijing, China.
  • Apple just slashed its quarterly revenue guidance amid slowing iPhone sales in China and a variety of other issues.
  • Analysts had recently warned on an impending slowdown in the iPhone market, due in part to slowing economic growth in China.
  • Google Trends data shows interest began waning years ago in both China and in the US.
  • Watch Apple trade live.

Apple, in a rare move on Wednesday, issued a warning on its quarterly revenue guidance amid slowing iPhone sales in China and a litany of other issues. The announcement slammed shares, sending them down more than 8% early Thursday.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” CEO Tim Cook wrote in a letter to investors. “In fact, most of our revenue shortfall to our guidance, and over 100 per cent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.

“Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline.”

But while analysts have warned of an impending slowdown in the iPhone market and Apple suppliers have been cutting their own guidance for the very same reason, Google Trends shows interest has been waning for years.

An analysis from DataTrek Research shows interest in iPhones – Apple’s flagship product that accounts for 63% of its revenue, according to UBS – peaked in the US in September 2012, when the iPhone 5 was released. It topped out in Hong Kong in September 2014, when the iPhone 6 was released.

Declining interest among Google users comes as the iPhone’s average selling price has risen and the quality has improved, leading to consumers holding onto their phones for longer periods of time.

“The market for +$US700 smartphones is a good one, to be sure,” Nicholas Colas, co-founder of DataTrek Research, told clients in a report on Thursday. “But technological disruption is all about scale and growth, not just profitability.”

Searches during the most recent iPhone launch – the iPhone XS/XR in September 2018 – were 46% below those in September 2012.

Here’s how searches for the term “iPhone” have trended within the US over the past 15 years.

The peaks have come toward the end of each year ever since the iPhone debuted, likely due to launches each September.

Now, here’s how searches for the term “iPhone” have trended in Hong Kong over the same timeframe. DataTrek Research used Hong Kong as a reliable proxy for “Greater China” results because Google is not available on the mainland. Search volumes for the most recent launch, last September, were 40% lower than the same time in 2014.


Read more:


Apple just warned its holiday quarter was a huge miss, and the stock is getting crushed

Analysts responded to the warning by cutting their price targets on Apple shares. Timothy Arcuri, an analyst at UBS, lowered his sales and earnings per share estimates for 2019 and 2020. He also cut his price target from $US210 to $US180. Still, that target implies a 14% gain from Wednesday’s closing price of $US157.92. Arcuri maintained his “buy” rating.

“Slower iPhone growth ultimately presents services headwinds, but AAPL still has huge untapped services rev pool (600mn+ active iPhones pay zero) and new bundle appears very likely,” he told clients on Thursday.

Read more about Apple’s sales and iPhone demand warning:

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