‘Notable deceleration’ in Chinese iPhone demand last month

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

ALL YOU NEED TO KNOW: The China smartphone market saw healthy growth in December in the broader market, though results for iPhones lagged. Overall smartphone shipments rose +29.8% y/y over the month but were down -6.0% sequentially. The CAICT data suggests MNC shipments (read, Apple) were down -15.4% y/y in December (vs. +10.5% last month and +88.3% in October) and down -32.2% sequentially. We would note, however, that for the Dec-qtr as a whole, MNC shipments have grown +26.6% vs. the same period last year after seeing relatively stronger results earlier in the quarter.

The deceleration seen in November MNC shipments seemed attributable in part to a more difficult compare given the delayed release of the iPhone 12 lineup (end of October and into November for some models). We would note that December was also up against a relatively strong compare, though the m/m decline was more significant than we saw last December…

Current consensus estimates are calling for iPhone revenue to increase by ~74% sequentially and ~3% y/y in the Dec-qtr, reflecting a significant sequential uptick from Sep-qtr. Importantly, we do not think this data suggests significant risk to consensus given the strong +26.6% growth it shows for the Dec-qtr vs. same period last year – channel fill could be an offset to this data but that could imply softer March-qtr trends potentially.

Net/net: Though December iPhone data ticked down from November, we view consensus estimates for the Dec-qtr as largely intact given strong growth over the quarter as a whole.

Maintains Outperform rating and $210 target.

My take: Hmm. A dark cloud on the horizon? If nothing else, this will give analysts something to ask Tim Cook next week.

Cue Figures 1 and 2 (MNC~iPhones):

apple daryanani deceleration

2 Comments

  1. John Konopka said:
    Probably Tim et al know something about why this is happening, I doubt they will tell us.

    It would be even more exciting if the analysts could give us week-by-week estimates of sales in China. Then every tick up or down would elicit more and more Adrenalin.

    Maybe next week we’ll get actual numbers for how Apple did in China for the quarter. That’s about as close to the truth as we’ll get.

    0
    January 18, 2022
  2. Robert Paul Leitao said:
    @PED In isolation this is neither good news or bad news. It’s one analyst’s view of data points. Greater China will have different seasonality trends than the west. This year Lunar New Year celebrations commence February 1st. I’d like to see more data points and analysis before crafting conclusions. As we know, iPhone series handsets remained in constrained supply conditions following the late September launch in several regions. The reportedly strong sales growth in October and November would tie back to iPhone 13 series handset availability. However, this would appear to contradict the Counterpoint research published on the blog January 13th.

    5
    January 18, 2022

Leave a Reply