Evercore: Apple iPhone shipments to China up 95% y/y last month

From a note to clients by analyst Amit Daryanani that landed on my desktop Monday:

ALL YOU NEED TO KNOW: November smartphone data points to continued growth in iPhone shipments following the launch of the latest generation of Apple’s flagship product. This is a large positive for Apple and marks continued recovery from October after the Sept-qtr saw an almost 30% drop in China revenue.

The broader Chinese smartphone market remains challenged with shipments down 17%, but MNC (read Apple) shipments were up 95%, significantly outperforming the broader market. The data set includes shipments broken down by domestic vs. multi-national companies. Apple likely accounts for greater than 90% of the multinational (MNC) shipments, so it serves as a reasonable proxy now that shipment data is no longer broken down by operating system.

Notably, JD recently indicated that it has seen very strong pre-order volume for the iPhone 12 Pro with over 500k pre-orders. In addition, our delivery time-line tracker indicates strong staying power for iPhone demand in China with the earliest delivery of the iPhone 12 Pro having increased slightly from last month at ~23 days. Finally, we would also note that we expect iPhone demand to remain STRONGER FOR LONGER given that the release of the 12 Mini and Pro Max should provide a second leg of demand.

Net/net: We expect growth to remain strong in December.

Maintains Outperform rating and $135 target.

Cue the Figures 1 and 2 (click to enlarge):

apple evecore iphone 12 china

My take: This is the third take on China’s Ministry of International Trade and Industry November smartphone shipment report I’ve seen and the most positive yet.

See also:

16 Comments

  1. David Emery said:
    So, what can we conclude from the last couple of articles on Apple in China?

    1. It’s still just ANALysts gazing at the Magic 8 Ball
    2. It’s likely you can find some statistic in there to justify whatever your preferred conclusion is.
    3. I personally think Apple’s decision to provide less information on iPhone sales is a debatable point, I can see arguments both ways. But until Apple changes its policy, see #1.

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    December 14, 2020
  2. Gregg Thurman said:
    My estimate.com DEC quarter revenue estimate of $103.5 Billion is looking pretty good.

    0
    December 14, 2020
  3. John Butt said:
    The AirPods Max is anecdotally looking like a hit.
    I tried ordering one yesterday and had problems with my card details – I don’t carry the credit card anymore – so was unable to order, but delivery was early March 2021.
    I had my credit card this morning and ordered – delivery April 2021!

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    December 14, 2020
    • Jerry Doyle said:
      I second Joseph B… great data points. This is as good as being on-site at an apple store and observing what’s flying off the shelves. 🙂

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      December 14, 2020
  4. Fred Stein said:
    Slight OT, but…

    When Apple split the stock 4:1 at the end of August, they knew that there was enough good news to keep the stock above $100 regardless of external factors.

    Now we’re seeing all that good news. Thanks John Butt, for adding one more data point.

    1
    December 14, 2020
  5. Tommo_UK said:
    Just go and look at teens posting videos on TikTok. They’re almost universally holding an iPhone 12 when they’re doing selfies and often sport an Apple Watch, making a point of ensuring it’s in view too.

    None of them want to be seen with anything except a iPhone. It’s incredible when you watch the trend literally unfolding clip after clip. Android died this Christmas. Nobody under 20 wants to be seen dead or alive with anything other than an iPhone – and it has to be a 12 or you’re going to be a social pariah; anything else is not cool enough for school.

    Analysts may not use TikTok, but they really should talk to their kids more if they want to see real trends, not for extrapolated assumptions, for themselves.

    5
    December 14, 2020
    • Fred Stein said:
      Nice insight. Thanks.

      Next up: AirPod Max on everyone on Zoom calls.

      2
      December 14, 2020
    • Jerry Doyle said:
      Good insight Tommo_UK: I welcome hearing from folk what they are seeing & experincing first hand like John Butt denoted. If you order an AirPod Max now and can’t get it in your hands until the first of April 2021 then that speaks “volumes!” Same with Tommo’s observation. Something tells me this is going to be an Apple Christmas! It’s better than that, though. I am beginning to believe it is going to be an Apple 2021 year 🙂

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      December 14, 2020
  6. bas flik said:
    Samsung will introduce S21 end of january in Europe. Then we will see if Android is dying as a high end model.

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    December 14, 2020
  7. Michael Goldfeder said:
    With many states passing legislation and moving to de-criminalize a vast array of narcotics, the Android market for “Burner Phones” used to facilitate those previously illegal drug transactions is now taking a big hit IMO. That’s the only area where the Android crowd held an advantage over Apple’s iPhone. If it ever really was a niche market that Apple wanted to be involved with at all!

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    December 14, 2020
    • Robert Stack said:
      Michael – re: “With many states passing legislation and moving to de-criminalize a vast array of narcotics…” Really? I’d read that Oregon recently decriminalized psychedelic mushrooms, but other than that – can you give any other examples? True, lots of states have decriminalized marijuana over the last decade, but I don’t think that qualifies as a “narcotic”. Is that be what you are referring to? Any formerly illegal substance?

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      December 14, 2020
  8. Michael Goldfeder said:
    @ Robert Stack: Los Angeles just elected a new DA (George Gascon), formerly the DA in San Francisco, and he just submitted an office directive to all DDA’s (Deputy District Attorneys-the courtroom prosecutors) that he will not be prosecuting any individual for possession of all narcotic substances. Meth, cocaine, heroin, PCP, etc.

    While it’s true to a degree that the majority of the media attention is only on the passage of the decriminalization of marijuana, this is another layer of the issue that receives absolutely ZERO attention in the media and is flying well under the radar screen throughout the country.

    Gascon also wrote a ballot proposition while the SF DA that was put into effect in 2014 that decriminalized all Felony drug possession cases from straight Felonies to Misdemeanors. Now he’s refusing to prosecute the narcotic misdemeanors.

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    December 14, 2020
    • Robert Stack said:
      Is he pursuing the Amsterdam philosophy? That is, in terms of the user, is he seeking to decriminalize and treat the user as someone with a health problem who needs to be treated? Is he also seeking to decriminalize selling/dealing? I’m not sure, but I think in the Netherlands selling/dealing is still a crime…as it should be IMO. Of course no one really knows how many Android phones are used as cheap throwaways for drug deals. And I doubt people would respond honestly to surveys! 🙂

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      December 14, 2020
  9. Michael Goldfeder said:
    Probably closer to the Amsterdam model. Although I haven’t been there for quite some time. When I was there, I believe it was just hash and marijuana that was being sold. The philosophy as I understand from the DA is that sending folks to prison is deleterious, and provides no actual deterrent other than the swelling of prison populations and causing more homelessness.

    By not arresting and prosecuting anyone for simple possession, perhaps they will be inclined to seek treatment once they hit rock bottom and wind up homeless on the streets. He was former high ranking official with the LAPD before becoming the DA in SF. His policies ignore current state statutory law and time will tell how successful this approach is to ending the narcotics problem.

    Maybe drug dealers are next in line for a free pass from prosecution?

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    December 14, 2020

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