Apple’s iPhone shipments in China outperformed in May, UBS says

© Reuters.Apple (AAPL) iPhone shipments in China beat expectations in May, UBS says

Sam Bugda

Apple’s (NASDAQ: ) iPhone sales in China rebounded strongly in May, rising 13% year over year, “significantly outperforming the market,” according to a Tuesday report from UBS analyst David Vogt.

The analyst said in a note to clients that the iPhone’s market share in China rose 320/890 basis points year-on-year to 16.4 basis points in May.

“In May, China’s overall smartphone shipments declined by around 9% year-on-year, despite the ease of last year (down around 31% YoY in May 2021). However, on a monthly basis, shipments were up around 16% , as data suggests Covid lockdowns and marginal supply chain shortages are diminishing, which is consistent with our recent inspection. More importantly, we estimate iPhone shipments to be up around 13% year-over-year and around 155% quarter-over-quarter, which is consistent with our survey The results were consistent,” Vogt wrote.

“In May, we estimate Apple’s shipment market share in China to be 16.4%, up 320 bps year-over-year and 890 bps mom. Given the strong momentum in May, we estimate that iPhone shipments in China in April and May will increase by 320 bps. Volumes combined were only down 9%, compared with a 23% decline in the broader market.”

As such, UBS believes the potential disruption should have been caught before the tech giant reports earnings next month, with its expected 42 million iPhone sales in the June quarter, minimizing downside risks.

“Overall, China’s smartphone shipments fell 14% YoY in May, following a 42%/34% decline in March/April. Although compensation in May was easy (32% decline in May 2021), While there are signs of margin easing, lockdowns and parts shortages last month could be headwinds. Given the modest easing, shipments from local brands did increase by about 1% month-on-month, but iPhone shipments for the month But it lags significantly. As a result, we estimate that local brand share fell to about 84% in May from 93% in April, down 320 basis points year-over-year,” added Vogt, who maintained his $185 price target and buy rating.

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