“September represents what should prove to be a momentary period of quiet ahead of robust demand for the iPhone 13 lineup.”
From a note to clients by analyst Amit Daryanani that landed on my desktop Tuesday:
ALL YOU NEED TO KNOW: China’s smartphone market saw fairly muted results in September in both the broader market and iPhones. Smartphone data suggests MNC shipments (read, Apple) were down -31.6% y/y in the month of September (-20.1% m/m) – notable delta vs. >100% m/m growth during the last September launch in 2019 (2020 launch was in October).
While the results are fairly muted vs. expectations we think a number of factors could be at play here, including that the prior launches (2019, 2018, etc.) took place several days earlier in the month than the Sept-21 launch. It is also difficult to draw concrete conclusions from the past month’s data since it is impossible to discern how many iPhone 13 shipments it captures.
October data will likely give us a better look at the strength of this cycle. We would also note that early signs are pointing to robust demand and strong mix for the new lineup, with our iPhone Delivery Tracker showing elevated wait times, particularly for the Pro and Pro Max models across all regions we track, including China at 35 days until first delivery (up from 28 days in our previous tracker).
Current consensus estimates are calling for iPhone revenue to increase by ~56% in the Sep-qtr. We would note, though, that comps for the Sep-qtr are easier this year than normal as last year’s iPhone release was delayed until the end of October. This data set includes shipments broken down by domestic vs. multi-national companies. Apple 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.
Net/net: The month of September represents what should prove to be a momentary period of quiet ahead of robust demand for the iPhone 13 lineup and we expect strength ahead.
Maintains Outperform rating and $180 target.
My take: Compared with 2019’s 100% increase, that’s a splash of cold water. Should make next month’s numbers look that much better.