China’s response to an increase in COVID cases threatens to depress sales in the world’s largest smartphone market, but Apple could still hold up nicely, analysts told CNBC.
On Wednesday, China reported more than 20,000 Covid infections with the majority in the mega city of Shanghai. Authorities there have imposed strict lockdown measures in the city, threatening logistics and consumer spending.
MacDailyNews Take: As we wrote on March 15, 2022, “Memo to China: There’s no such thing as zero-COVID. Duh.”
Neil Mawston, executive director at Strategy Analytics, forecasts a 20% year-on-year decline in the second quarter for smartphone shipments.
Neil Shah, partner at Counterpoint Research told CNBC smartphone sales for April and May could fall 12% to 13% year-on-year…
China’s smartphone shipment decline in the second quarter will be “mainly due to the weaker momentum of the Android market,” [Will Wong, research manager at IDC] said.
However, Apple could fare quite well. Shah said that Apple could see a decline of around 4% to 5% in shipments in the second quarter, but that is partly seasonal as the effect of brand new product releases wears off. Apple released its newest products toward the end of last year.
Wong said Apple could actually see positive growth in the second quarter “amid the decline of Huawei and the lack of strong high-end competitors.”
Mawston said he expects Apple to actually grow its overall market share in China in 2022 “as its loyal, affluent fans upgrade to new or more affordable 5G models.”
MacDailyNews Take: Excellent news for Apple shareholders who’ll likely see all-time second quarter record earnings and the year ahead dividend and buyback plans reported by Apple on April 28th.
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