Apple’s iPhone sales may be dented, but share continues rise

Experimental street dancer Jin Lee Baobei, wearing the new Pride Edition Sport Loop band for Apple Watch, shot on iPhone 13 Pro by Collier Schorr. “Pride is an essence that affirms: however you decide to change, grow, and show up is enough,” Baobei says.

Apple may achieve a slightly pyrrhic victory in the smartphone market – while it may see a reduction in shipments, it may also see big gains in market share. That’s the takeaway from some of the reports crossing the desk this morning.

Apple’s shipments may decline overall

Gartner came out the gate predicting global smartphone and PC shipments will decline this year, citing slowness in the Chinese market.

“A perfect storm of geopolitics upheaval, high inflation, currency fluctuations and supply chain disruptions have lowered business and consumer demand for devices across the world,” said Gartner analyst, Ranjit Atwal.

Shipments are expected to experience decline across the board.

• PC shipments to fall 9.5%
• Tablet shipments to fall 9%.
• Smartphone shipments down 7%.

The analysts also predict decline in demand for 5G phones on strength of what’s taking place in China. Coupled with war, environmental Armageddon, recession, and everything else, things really don’t seem terribly rosy, because they ain’t…

But Apple’s market share seems set to grow

Strategy Analytics has a second report which appears to have been overlooked since it appeared. That report claims that while smartphone sales in China fell 25% during that nation’s annual 6.18 online shopping festival – Apple outperformed the market, grabbing c. 50% share. That means that while Apple did see a decline of 4% YoY, it also generated market share gains. This reflects similar statements from UBS last week.

Strategy Analytics notes that average smartphone sale prices climbed, thanks to the greater mix of iPhone sales – iPhone marketshare of what was sold 6.18 grew 13%.

[Also read: Apple’s ‘Innovation engine at full throttle’, Morgan Stanley]

Solidified leadership

Analyst Peng Peng said: “Apple solidified the leadership with impressive performance during 6.18 festival this year. Apple outperformed the market selling nearly 7 million iPhone units, modestly down -4% YoY. We estimate Apple generated a revenue of 41.5 billion CNY (US$ 6.3 billion), with a full retail price of 6,300+ CNY (950+ USD). Apple ranked top by revenue share across all major platforms (JD, TMall and Pinduoduo etc.).”

Linda Sui, Senior Director at Strategy Analytics, added, “JD.com remains as the major platform. We estimate roughly 49% smartphones were sold through JD.com during 6.18 online festival this year, followed by TMall and Taobao (combined took 30% volume share). However, the leadership and dominance of traditional e-retailers (JD.com, TMall and Taobao, and Pinduoduo) have been dented by the rising livestreaming platforms, such as TikTok and Kuaishou that have been catching up quickly. We estimate TikTok and Kuaishou contributed to 8% and 6% smartphone online sales volume share this year during 6.18, up from 3% and 2% last year. We recommend all stakeholders tracking smartphone online channels to closely monitor and evaluate the development of China online market.”

What this means?

It’s simple, really: The signs are that while Apple is not immune to the consequences of the utter failure of everything which seems to characterize our time, it is suffering less than the rest of the industry and benefitting in the sense that shoppers, while the chips are down, are gravitating to solutions which will stand the test of time. That’s the same basic urge that drove Apple’s ascendancy in the first half of the pandemic.

To my mind, I suggest this hints that current decline in Apple stock is probably overbaked, though the world itself remains in crisis and risk remains high.

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