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$AAPL China iPhone Shipments Outperform in May, Says UBS
“During May, overall smartphone shipments in China decreased ~9% YoY despite an easy comp last year (May 2021 down ~31% YoY). However, on a month-to-month basis, shipments were up ~16% as data suggests Covid lockdowns and supply chain shortages on the margin are abating, consistent with our recent checks. More importantly, we estimate iPhone shipments increased ~13% YoY and ~155% month-over-month as Apple took material share, consistent with our checks."

“In May, we estimate Apple’s China shipment market share came in at 16.4%, a 320 bps increase YoY and 890 bps MoM. Given the strength in May, we estimate iPhone shipments in China are down just 9% in April and May combined compared to the broader market down 23%.”

As a result, UBS believes its 42 million June quarter iPhone estimate should already capture the potential disruptions minimizing downside risk ahead of the tech giant’s earnings release next month.

“In aggregate, China smartphone shipments declined 14% YoY in May, following a 42%/34% decline in March/April. Although comps were easy in May (down 32% May 2021), lockdowns and component shortages on the margin were likely headwinds last month despite signs of easing on the margin. Given modest easing, local brand shipments did improve ~1% on a month-to-month basis, but materially underperformed iPhone shipments in the month. As such, we estimate local brand share fell in May to ~84% from 93% in April and down 320 bps YoY." UBS maintained Buy and $185 PT
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