Down 41% y/y in July after being up 225% y/y in June.
From a note to Evercore clients that landed on my desktop Wednesday:
ALL YOU NEED TO KNOW: The Chinese smartphone market was down 31% in July. CAICT data suggests MNC shipments (read, Apple) were down 41% y/y in July (vs. +225% y/y last month). The sharp decline in MNC shipments is unsurprising after the strong triple digit growth in June. It’s likely some sales were pulled into June and if we combine the June & July shipment figures we get two month growth of ~31%. YTD Apple shipments in China are up 5%, vs a 23% decline for the overall market as Apple continues to see notable share gains. The CAICT data for June just came out today, so it will be a couple of months before we get the September data which should give us our first look at the strength of demand for the iPhone 14. We expect demand for the iPhone 14 to be high in China and globally as lead times are already elevated in most regions. The CAICT 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: Apple shipments were down notably, but this was expected after the very strong growth in June. Apple continues to gain significant share in China and we expect the share gains to continue.
Maintains Outperform rating and $185 target.
My take: Shipments to China were interrupted last summer, which is what made this summer look so strange.