The iPhone accounts for most of Apple’s business, but can the success of the iPhone accurately predict Apple’s stocks? No, but the iPad might be able to.
Over at Bloomberg Businessweek, Mark Glassman argues that the iPad is more important to Apple than the iPhone, and that the revenues of the iPad might actually more closely align to Apple’s stock price than its other products.
Here’s where investors should start paying attention. By at least one measure, as the iPad goes, so goes Apple stock. Quarterly iPad revenue has a 68 percent correlation with Apple’s share price. That’s higher than the stock’s correlations to iPhone revenue (62 percent) or Mac revenue (40 percent).
If we consider unit sales rather than revenue, the iPhone becomes a better predictor of Apple’s share price than the iPad, but the difference is not enormous: Unit sales of the iPhone are 77 percent correlated with the stock; iPad unit sales are 68 percent correlated.
In other words, it might be a better idea to buy Apple stock before the new iPad is released than before the new iPhone is released. With two new iPads just a week away from announcement, that’s good to know.
- Source Bloomberg Businessweek