Apple data continues to show growth in tough environment

Several data points provide a little counterbalance to the seemingly unyielding negative Apple sentiment. Some might say these arguments stand a great deal stronger than some of that opinion. They show that while Apple faces headwinds, Mac, Watch and iPhone sales remain resolute. The demand pattern suggest anything Apple can’t ship in this quarter it will just sell next year.

US PC shipments fall, Apple share goes up

Apple’s PC sales in the US have increased an astonishing 26.5% annually, according to the latest data from Canalys. That’s in the context of double digit decline across the PC industry, with only Apple and Acer seeing any growth at all.

PC shipments in the United States fell by 12.1% in the third quarter year-over-year. Dell was down 16.1%, HP by 23.2%, Lenovo fell 22.2% while Apple increased 26.5% and Acer gained 14% in shipments.

It means Apple is now the number three PC maker in the US, and if it continues to grow at that rate it is on the way to second place – and there’s only one logical direction after that.

US tablets decline, Apple holds the lead

Apple maintained its long-held leadership position in the US tablet market with a 41% market share, said Canalys.

• Premium tablets have struggled with price-sensitive consumers in recent quarters, while affordable tablets have performed well.
• Second-placed Amazon secured a market share of 27% and grew shipments by 20% on the back of a successful Prime Day in July.
• Samsung came third with 1.6 million shipments, an annual decline of 13%. TCL continued its strong surge with 133% growth as it increased marketing and branding efforts in the region, while Microsoft rounded out the top five with a 12% decline.

Apple is still big in China

People may want better conditions and have become fed up with Covid restrictions and the continued unravelling of decades of partnership between the US and China spells terrible problems for all; particularly as jaw-jaw is always a better alternative than war, trade, or otherwise.

But Apple is still big in China and achieved the highest ever monthly market share there in October. Counterpoint informs  us that one in every four phones sold in China in October was an iPhone.

Also a fact:

“While the sales for other key OEMs declined in October, Apple grew 21% MoM. In YoY terms, China’s sales declined 15%, while Apple’s sales declined just 4%,” says Counterpoint. In other words, yes, the market is soft, but Apple is growing all the same, and as it does its market share is also increasing. It now holds 25% of the Chinese smartphone market. The iPhone 14 Pro Max was the best-selling device in China in October, followed by the iPhone 14 Pro.”

That’s good business for China, good business for Apple, and good for the US, given it means money flows back home.

Commenting on the trend of increasing penetration of the Pro series in the iPhone 14 series, Senior Analyst Varun Mishra said,

“The trend of rising Pro series popularity is not limited to China. It is there in other key markets like the US as well. Apple now offers significant design and specification differentiation between the Pro and non-Pro line-ups. For example, the Pro versions now get the latest processor as well as the dynamic island, which further increases the line-up’s exclusivity. Consumers can see a clear value-addition in spending extra for the Pro versions. In our primary interviews in the past, we also found consumers demanding a larger differentiation for the Pro versions. As a result, there is a clear demand shift towards the Pro line-up in the 14 series. The wait times also suggest the same trend. Delivery times for the Pro series have been 3-4 weeks across key regions with the supply catching up with the demand. Overall, the Pro series will help Apple reach record average selling prices (ASPs) in 2022.”

India loves them Apple Watches

India is flourishing. Not only is it benefitting as manufacturers site alternative production hubs there, but the economy seems to be switching on – and Apple’s on the ride. iPhones are huge in India, but so too is Apple Watch, which is now the biggest selling premium smartwatch in the world. Apple accounts for 50.6% of that segment, says Counterpoint.

Highlights

• The global smartwatch market grew 30% YoY.
• India grew 171% YoY, taking the top spot for the first time thanks to the growth of local brands.

[Also read: Apple may have made millions on Apple Pay this season]

• Apple grew 48% YoY thanks to strong sales of its newly released Apple Watch 8 series. Released in early September, the new series accounted for about 56% of the overall shipments.
• Apple accounted for about half of the market among HLOS smartwatches in Q3 2022. However, this was a slight decrease from the 54% share in Q2 2022 due to the slump in North America and Europe, which are major markets.

My take?

Since supply chain problems began to bite last year, Apple has consistently been growing share in most of its markets and seems resistant to the decline other vendors face. Sure, the reality is that every vendor is facing challenges, but within the current environment Apple continues to grow as it works to increase ARPU. While the risk of additional geopolitical friction is a concern, assuming politicians manage to remain sensible, the softness in the stock seems overbaked to me.

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