Apple Smartphone Shipments Grow 5X In China & And Outpace Market

Apr 14, 2020
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The outbreak of the coronavirus and the forcing of the global population into lockdowns has paralyzed economies all over the world. China, where the virus originated, was the first country in the world to force its populations indoors in order to ensure that medical professionals are not overwhelmed by a large number of patients. Apple (NASDAQ:AAPL), for its part, was one of the first companies in the world to admit that the coronavirus had taken a bite of its forward guidance for the second quarter of the fiscal year 2020. Now, with fresh data from China, we can take a look at just how bad the iPhone-maker's sales were hit in the country during the time of the coronavirus lockdowns.

Apple iPhone Shipments In China Jump 5x In March Signalling Important Recovery In An Uncertain Time

Data published by the Chinese Academy of Information and Communications Technology (CAICT) states that in the month of March, the country's overall smartphone shipments grew by 3x as the country started to recover from the coronavirus fallout. Lockdown restrictions were officially lifted in the virus' outbreak city of Wuhan on the 8th of this month, with authorities already having eased restrictions throughout late March and early April.

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For Apple, this solves at least two of the company's problems. As sentiment in China grows positive and populations regain their freedom of movement, foot traffic in the company's stores and other retail outlets in the country is bound to increase - and with it, drive up the sales of Apple's products. Additionally, as lockdown restrictions decrease, movement of goods and services in the country has picked up; which eases the supply crunch that different Apple retail outlets across the globe started to face following shutdowns in China early this year.

Apple's LCD-based iPhone 11 launched late last year is thought to have revived sales for the lineup by bringing down the entry-level price.

According to the CAICT, mobile phone shipments in China stood at 21 million in March, a figure that represents 3x growth over February's numbers, but is 80% of the total shipments made in March 2019. Looking at this, it's clear that while the Chinese market has mostly recovered from the coronavirus outbreak, it still has some way to go before erasing all losses and hoping of posting year-over-year growths.

Apple had shipped 500,000 smartphones in China in February, revealed the CAICT and in March, this figure grew by five times to stand at 2.5 million devices shipped, showing that the company outpaced the smartphone market in terms of growth.

In the fourth quarter of the calendar year 2019, Apple had shipped roughly 73 million iPhones all over the globe - an amount that netted the company $56 billion through iPhone net sales. Dividing the latter by the former reveals an average selling price of $767/iPhone, and multiplying this with the company's shipments in February and March in China, and assuming that the product mix sold to Chinese customers resembles global iPhone sales reveals that during these two months, Apple could have earned approximately $2.3 billion in net sales.

This amount is 17% of Apple's total net sales in China during the company's first fiscal quarter of 2020. Given that the iPhone remains Apple's biggest selling product, and lockdowns in Europe and North America are set to persist, the company's fiscal future for this quarter is not looking very certain. For while China might be on a path to medical and economic recovery, populations in the United States and Europe are facing some of the darkest days in their history.

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