UBS Sees iPhone Recovery in Weak Smartphone Market in China

22 JUNE 2022 - May was a good month for iPhone in China. That’s the word from UBS analyst David Vogt, according to a piece from investing.com.

Overall, smartphones were down 9% y-o-y. Pretty ugly considering the easy compare from May of 2021, when smartphone shipments were down 31% versus May 2020. Month-to month though, shipments were up about 16%. Vogt says “data suggests Covid lockdowns and supply chain shortages on the margin are abating…” three cheers.

Things were much better for iPhone, as stated. On that, Mr. Vogt wrote, “we estimate iPhone shipments increased ~13% YoY and ~155% month-over-month as Apple took material share…” That gave iPhone about 16% of the Middle Kingdom’s market for the month. He and his think iPhone shipments in China are down about 9% for April and May combined, way better than the broader market - estimated to be down about 23%. “As a result,” says the site:

…UBS believes its 42 million June quarter iPhone estimate should already capture the potential disruptions minimizing downside risk ahead of the tech giant’s earnings release next month.

In other words, that 42-million expectation is unchanged. At least officially. That said, another piece on the same note from Barron’s had Vogt saying that the latest numbers increase his firm’s “confidence” that their “June forecast could be conservative.”

Does “confidence” really belong in that sentence? “I’m increasingly sure I could be wrong?” Eh…

Mr. Vogt has a “Buy” rating on Apple shares. His price target on the shares is $185.