Credit Suisse issued a cautionary note on Apple’s iPhone performance in greater China early Thursday morning. In the note, seen by AppleInsider, analyst Matthew Cabral said that checks showed a more than 35% yearly decline in Chinese iPhone shipments in November — trailing far behind a broader Chinese smartphone market that has remained relatively flat over the same period.
In presenting the data, Cabral acknowledged the challenging year-over-year compare Apple faced given vast differences in the timing of its iPhone launches over the past two years… The firm’s views on Chinese iPhone sales almost immediately came under scrutiny from rivals, with Evercore ISI analyst Amit Daryanani reiterating his firm’s newly established $305 price target and “Outperform” rating. He issued a note to clients urging them to “look past the [Chinese] iPhone noise and focus on several upside catalysts” that he believes will help the iPhone maker post a solid beat to earnings for its current December quarter.
“We think investors appear to be reacting to data-points related to China’s MIIT smartphone data that shows a decline in the month of November,” Daryanani said. He stressed the tough year-over-year compare that Cabal had originally alluded to while presenting his bearish Phone call — the fact that iPhone XR was launched in November 2018, while the iPhone 11 was released in September 2019.
MacDailyNews Take: Don’t listen to the noise from tea-reading analysts, listen to Apple’s CEO:
Yes, we had a very good September… and the lead of that is sort of the reception of iPhone 11 and 11 Pro and 11 Pro Max, and so we feel really good about how we’ve gotten started there [in China]. As you can tell from the numbers, we’ve significantly improved since the beginning of the year. We’ve gone from minus well into the 20s to minus 2 last quarter. And if you looked at that in constant currency, we actually grew one. And so there is a very slight growth there. We obviously want that to be better. But we feel good about how we’re doing. I think it’s a combination of things that are — that have turned things around. On a macro basis, I think the trade tension is less and that clearly looks positive right now with the comments that we’ve been reading in the press.
Secondly, the products have been extremely well received there. Third, the things that we’ve done from a pricing and monthly payments point of view and trade-in, getting the trade-in program up and running, all of these things have had moved the dial. And so it’s sort of the sum of all of that. I would also say, it’s not all about iPhone in China, the services area grew double digit. We began to see more gaming approvals in the quarter, or I should say some key gaming approvals. It’s not all about quantity, but about which ones, we saw that. Also Wearables, Wearables are doing so great at a company level. They’re doing even better in China. And so lots of positives there. — Apple CEO Tim Cook, October 30, 2019