Early indicator puts Cook's 'iPad Christmas' prediction at risk

Analyst points out that Google Trends -- a predictor of past quarter sales -- is down 25% from last year at this time

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% 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 Sept. 30; on Monday, Apple said it had sold 14.1 million, a difference of about 600,000 units, or about 4%.

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% 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% less than Q4 2012's sales).

Those numbers are far below projections touted by Wall Street analysts. Brian White of Cantor Fitzgerald & Co., for example, has pegged iPad sales for the fourth quarter at 24.5 million, or up 7% 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% expansion of the number of countries in the Nov. 1 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 9% 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 early Friday, with its online store taking orders beginning at 12:01 a.m. PT (3:01 a.m. ET). Its retail stores will open at 8 a.m. local time.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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