China Smartphone Correction & Update
Lastweek we noted March and 1Q smartphone shipments in China. In that note was the line, “5G smartphone shipments in April in China were 16.19m units, up 42.3% m/m but down 41.1% y/y against a very strong March in 2021 (+82.5% m/m & +342.5% y/y) after the 2021 New Year holiday”, which should have read ‘March’ rather than April. Please excuse the error. That said, we also noted that typically April smartphone shipments in China have been up 21.8% m/m (5 year average) although down last year, while we noted such a gain might be a bit more difficult this year given the macro circumstances and Chinese COVID lockdowns.
Our very early data from China indicates that April smartphone shipments were only 17.6m units, which is down 18.0% m/m and down 36.0% y/y far worse than expected. As these are unofficial and unconfirmed shipment metrics we cannot definitively say how bad April smartphone shipments were in China, but we expect to reduce our full year expectations for Chinese smartphone shipments once we can confirm the April numbers. With the first four months of this year seeing substantial y/y Chinese smartphone shipment declines, it is getting progressively harder to see a scenario where a recovery could balance out that early weakness. We believe Apple saw only a slight decline in Chinese smartphone shipments in April and China’s Honor (pvt) brand saw a large y/y gain as it saw only modest sales in April last year, while other major Chinese brands saw shipment decline between 32.0% and 42.7% on a y/y basis, should the April preliminary data prove correct. The effects of recent COVID lockdowns in Shanghai, Zhengzhou, Shenzhen, and Beijing are being blamed for the poor results, with consumers unable to shop and manufacturers unable to ship.
Our very early data from China indicates that April smartphone shipments were only 17.6m units, which is down 18.0% m/m and down 36.0% y/y far worse than expected. As these are unofficial and unconfirmed shipment metrics we cannot definitively say how bad April smartphone shipments were in China, but we expect to reduce our full year expectations for Chinese smartphone shipments once we can confirm the April numbers. With the first four months of this year seeing substantial y/y Chinese smartphone shipment declines, it is getting progressively harder to see a scenario where a recovery could balance out that early weakness. We believe Apple saw only a slight decline in Chinese smartphone shipments in April and China’s Honor (pvt) brand saw a large y/y gain as it saw only modest sales in April last year, while other major Chinese brands saw shipment decline between 32.0% and 42.7% on a y/y basis, should the April preliminary data prove correct. The effects of recent COVID lockdowns in Shanghai, Zhengzhou, Shenzhen, and Beijing are being blamed for the poor results, with consumers unable to shop and manufacturers unable to ship.
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