Analyst: Chinese Golden Week phone sales weak

Apple’s iPhone XS Max sales are holding up, according to Rosenblatt’s Jun Zhang. The Chinese also-rans—and the iPhone XS—not so much.

From a note to clients that landed on my desktop Wednesday morning:

During China’s Golden Week (October 1-October 7), we tracked several large consumer retail channels. The data indicates that smartphone sell-throughs were down 7% y/ y, in terms of units, during the holiday week.

iPhone XS sales continued to be weak, while iPhone XS Max sales remained steady, around three times that of iPhone XS sell-throughs. The 512G iPhone model accounted for 50% of overall sell-through in China. Although Apple (AAPL: Buy) has not made any adjustments to its iPhone production, we expect there to be some cuts on iPhone XS production and reallocation towards more 512G models. Meanwhile, Xiaomi (1810.HK: NR), VIVO and OPPO high-end smartphone sell-throughs were weak, and we are now seeing Chinese OEMs cutting high-end smartphone production for Q4…

Overall, we believe consumer spending confidence was weak during the Golden Week holiday. We believe the P2P lending system crack down and weak market performance in the Chinese stock market/real estate market also impacted Chinese consumer spending.

My take: The weakness in Golden Week—one of China’s biggest shopping holidays—had been previously reported. That sales of Apple’s top-of-the-line iPhone are holding up is new.

5 Comments

  1. Fred Stein said:

    1) Great news: Half of Apple’s sales were iPhone XS Max 512 at $1449 (much higher in china).
    2) Copycats OPPO and Xiaomi sales were down. My guess is that Huawei and used iPhone impacted them.

    Prediction: Big story coming in next quarterly – The Max Max.

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    October 10, 2018
  2. Gianfranco Pedron said:

    Loving my new Space Grey Xs Max 256 and my wife is enjoying her hand me down 6s Plus.

    Interestingly enough, I was able to pick up my new phone without pre-order or reservation at my local Apple store, something I had never been able to do in previous years.

    Either supply is much better, overall demand is down or the fact that the Chinese iPhones are physically different from those offered in the rest of the world this year (two physical sim card slots for Chinese phones), reducing grey market demand for smuggled phones, might explain this availability.

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    October 10, 2018
    • Gregg Thurman said:

      I received my iPhone Sx Max 256Gb 5 days after ordering it online (from Verizon). This is my first large screen iPhone and I am very impressed with its performance and the quality of the screen.

      With the reports of product mix coming out I may have to adjust my iPhone ASP upwards (don’t know how much until I adjust product mix percentages).

      As bad as AAPL seems to be trading today it is following the Historic Trend like a shadow. I can see a Friday intraday low at about $218.00.

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      October 10, 2018
      • Gregg Thurman said:

        Wow, AAPL dropped about $3.00 while I was posting the above, so I guess my $218 forecast was a bit conservative : )

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        October 10, 2018
        • Gianfranco Pedron said:

          Wow. AAPL down $10.51 today. Not as bad, percentage wise, as the rest of FANG, but still.

          Have you noticed any correlation of the historic AAPL trend with other FANG members or is the trend you mapped unique to AAPL?

          Can’t wait for q4 results on Nov. 1.

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          October 10, 2018

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