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):