From a note to clients by Wells Fargo’s Aaron Rakers that landed in my inbox Friday:
With an ongoing focus on incremental iPhone demand-related data points, today we would highlight the release of China’s December (and thus full 4Q17) mobile phone export data – ending the quarter with a strong / positive uptick; historical correlation with iPhone shipments (ex-China) now implying a high-60MM / low-70MM ship estimate (ahead of previously implied mid-60MM level)…
Internal China demand is a key focus (see final chart below). While we have found internal China demand data points to be a bit more difficult to analyze, we would note that China’s Ministry of Information Industry & Technology (MIIT) data on monthly smartphones has been weak – total smartphones (licenses) declining 23% yr/yr at 116.5M in 4Q17, in which Android-based smartphones declined 19% yr/yr and implied non-Android phones were down 36% yr/yr. China domestic branded smartphones were down 25%, while non-China branded phones were down 4% yr/yr.
Click to enlarge.
Maintains Market Perform rating and $190 price target.
My take: Rakers muddies the waters waters by offering only half of a two-part iPhone estimate. He gives us a range for shipments leaving China (high 60 millions to low 70 millions), but no estimate for shipments within China.