Bernstein Forecasting 3 Million Apple Watch Sales This Quarter, 'Buzz Data' Pointing Even Lower Around 1 Million Units

Toni Sacconaghi, Bernstein senior analyst, published a note to clients last week in which he argued that sales of Apple Inc. AAPL's Apple Watch might not be as good as the Street is expecting because of the low 'Internet buzz' the product is generating.

Sacconaghi was on CNBC recently to discuss why he is projecting lower Apple Watch sales than the Street.

Buzz Suggests Low Sales

"Well we are forecasting 3 million units for this current quarter," Sacconaghi began. "I think, consensus is a little bit higher than that at 4 million units. But...our analysis of internet buzz which is effectively Google Trend data overtime suggests that there is downside to that number. And if you literally took the buzz data as is you'll be getting a number closer to a million units for this quarter."

The Buzz Might Not Be The Best Indicator

Sacconaghi was asked if it's possible that people aren't really talking or taking much interest in the news regarding Apple Watch, but are buying it on the sly. He replied, "It's certainly possible. There are numerous considerations that could account for the lower buzz associated with it."

"One certainly is China, which is a country that is increasingly important to Apple and Google search is basically not available in China, whereas when the iPod, iPad came out China was much less of a contributing factor for Apple. The other...people may buy this differently, but certainly the magnitude of the difference [in] buzz is very striking."

Apple Music

On what kind of expectations will Apple be having with its music streaming service Apple Music, Sacconaghi said, "I think, Apple has high expectations, but music as a category is relatively small for Apple. So, today the majority, almost all the revenue, from music at Apple is through paid purchases and that amounts to about 2 percent of the company revenues and about 1 percent of the profits. Paid music is on the decline."