Wells Fargo: iPhone shipments up in March, down for year

Aaron Rakers charts the Chinese tea leaves all the Apple analysts have been reading.

From a note to clients that landed on my desktop Saturday:

Late this week China exports for the month of March were published, in which total mobile phone (wireless handset) exports declined 8% y/y, but increased 46% m/m. For total 1Q19, exports declined 19% y/y and 43.5% q/q (vs. 5-year average 1Q seq. decline of 36%; -33% q/q in 1Q18). This compares to a 4% y/y decline in exports during the December quarter.

As shown below, we have found a high historical correlation with Apple’s iPhone shipments, excluding China. If we were to apply this historical correlation for 1Q19, we would be left to estimate implied iPhone shipment (ex-China) to decline in the mid-to-high 20% range y/y, or implying the low- 30 million range. Coupled with our below analysis of internal China, we would be left to estimate C1Q19 iPhone ship in the high-30M to 40M range vs. our estimate of ~44M units (street: 43M units).

Cue the charts:

wells fargo iphone china

wells fargo iphone china

Click to enlarge.

Maintains Market Perform rating and $160 price target ($40 under water). 

My take: Still counting iPhone units.

6 Comments

  1. Robert Paul Leitao said:

    Joe:

    Handheld wireless telephone exports is likely an industrial classification or export classification for which comparable historical information is available. As the analyst states, they have found a “high correlation with Apple’s iPhone shipments, excluding China.”

    I wouldn’t dismiss the data. Apple is guiding to a revenue decline YOY in the March quarter. What has become tedious are models that value the company based primarily or almost exclusively on highly cyclical iPhone unit sales.

    1
    April 14, 2019
    • David Emery said:

      I think both of these comments are on-point!

      0
      April 14, 2019
  2. Fred Stein said:

    Yes counting iPhones is like finger paintings on refrigerators of parents of small kids.

    Tracking iPhone installed base as in active accounts might be interesting.

    0
    April 14, 2019

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