China Academy of Information and Communications Technology (“CAICT”) data for March arrived Monday. Excerpts from the analysis I’ve seen:
Amit Daryanani, Evercore ISI: China Smartphone Data Shows Normalization in March. March smartphone data points to a generally strong market, though somewhat of a more muted data point for AAPL. The smartphone data suggests iPhone units were down -3% y/y in the month of March (up +25% m/m). We would add, though, that the previous two months of shipments (January/February) were up an impressive 160% vs. the same two month period in 2019 (perhaps more relevant given easier compares in 2020 as shutdowns took effect)… We would also add that we expect iPhone demand to remain STRONGER FOR LONGER given strong demand for iPhones both from a replacement and new user perspective coupled with attractive carrier promotions. Net/net: While March data is somewhat muted for AAPL, we think the March quarter overall will prove strong given robust results in January and February, implying upside to March-qtr expectations. We expect growth to remain strong for AAPL in March-qtr and beyond as the company benefits from a trifecta of – iPhone super cycle, ecosystem expansion, and monetization of their install base. Outperform. $175.
David Vogt, UBS: Monthly shipments in China suggest strong Q1; March YoY decline suggests lack of ‘super cycle’. Based on our analysis of the China monthly smartphone data, we est. Apple’s shipments were down 14% YoY in March compared to roughly 255% and 122% YoY growth in Feb. and Jan. We believe the deceleration was somewhat expected and could continue in the months of April and May given tough compare versus last year’s demand impact from the pandemic. The data also suggests Apple lost share supporting our view that the iPhone 12 cycle is unlikely to be a ‘super cycle’ as some had hoped and feel comfortable with our 220M iPhone unit forecast for FY21. Buy. $142.
Rod Hall, Goldman Sachs: iPhone 12 cycle continues to track below the last redesign cycle. CAICT data for March handset shipments in China was normally seasonal in both February and March after the strong Lunar New Year period in January. Within the data, implied iPhone shipments for this redesign cycle continue to track below the iPhone X cycle as we have been forecasting. Total handsets came in at 36m units up 66% M/M and also higher than pre-COVID levels of 30m/28m in 2018/19. Combined September to February international (mostly iPhone) units are now at 31.9m which is 14% lower than the iPhone X redesign cycle over that same period. While this total is up on last year’s 24.3m units it is consistent with our view that elongating replacement rates are likely to drive lower and lower peak unit volumes around every three year iPhone redesigns. We also note that this challenges the bullish view that Apple replacement cycles have stabilized and particularly so given how substantial volumes in China are for Apple. Sell. $83.