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China’s Smartphone Shipments Down Sharply in February; Apple’s Results Seen as ‘Solid’ -Breaking


© Reuters. China’s Smartphone Shipments Fall Sharply in February. Apple’s Results (AAPL) Seen as Solid

Comparable to last year, smartphone shipments fell 31.8% to 14.5million units in February.

According to a report from China Academy of Information and Communications, shipments fell by 21.3 Million handsets in February 2021 and 32.4 Mio in January 2022.

Global chip crunch problems continue to affect smartphone makers, affecting their ability to produce.

Numerous automakers have reported chip-sourcing issues due to miscalculated demand and plant shut downs.

In the years since, chip shortages have expanded to include smartphones as well.

China-branded mobile phone shipments fell 35% y/y. However, non-China-branded phones – which are a proxy to Apples (AAPL), iPhone – saw only a 5% decrease y/y. The total number of shipments rose 10% over the previous two months.

David Vogt from UBS said that in February, the iPhone outperformed Chinese rivals with a market share of 320bps rising to 11.4% YoY.

We estimate that China’s iPhone sales reached 48 million, which is a 14.6% market share. Despite Apple’s impressive share gains, investors will be focusing on lockdowns in China in March. Although initial tests indicate that there is no significant risk to the March quarter’s performance, an extended lock down in China could cause a small headwind in June. Vogt explained in a client memo that while we don’t plan to change our iPhone March (55M), FY22 (235M), or June (45M) forecast due to the mitigation efforts of Apple and its partners, they are closely monitoring changes in policy.

The analyst therefore left unchanged his March/June iPhone unit estimations, despite solid China data. These market gains have been offset by Russia, Shenzhen’s COVID lockdowns.

Vogt projects that Apple will sell 55,000,000 iPhones in March, a lower number than the consensus of 57.5 million.

Allen Chang, analyst at Goldman Sachs (NYSE) said he is still selective about smartphone components in spite of modest market growth. He prefers market share gains or product mix improvements/product line expansion to those who have market share.

By Senad Karaahmetovic

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