Credit Suisse: iPhone sales in China dropped 35% y/y in June

"Monthly trends can be lumpy." — Analyst Matthew Cabral

From a note to clients that landed on my desktop Friday afternoon:

Government data implies a sizeable drop in June China iPhone shipments: iPhone shipments in China fell 35% y/y in the month of June (per MIIT “non-Android” data), as the domestic smartphone market softened (-5% y/y in June) and the full impact of trade tensions, which re-ramped in late May, appear to have taken hold.

Looking at 2Q as a whole, China iPhone units were down 12% y/y, lagging the overall Chinese smartphone market at +1% y/y; while we acknowledge monthly trends can be lumpy, June was a meaningful deceleration vs. unit declines of 6% in May and 2% in April that were beginning to show signs of easing pressure.

As a point of reference, Apple’s Greater China revenue was down 27%/22% y/y in C4Q/C1Q with China iPhone units down 20%/42% y/y, respectively, per IDC. While the apparent de-escalation following the G20 in late June is encouraging, we continue to expect iPhone shipments will remain volatile within China until the trade dispute reaches a final resolution.

Maintains Neutral rating and $209 price target.

My take: Only that morning, J.P.Morgan told us the headwinds were abating. Go figure.

One Comment

  1. Aaron Belich said:
    Credit Suisse, Deutsche Bank, and Goldman Sachs Analysts have been terrible for years at calling Apple. Never mind the fact that the former two have been losing money due to fines and loss of services revenue because of the major shifts in fee-based financial services transactions. DB is laying of 10k folks over the next few years if I recall correctly.

    July 13, 2019

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