Apple management has emphasized that China is one of the company’s most important markets, and indeed smartphone purchases there continue to grow at a steady pace. During the month of July, smartphone shipments in China climbed 10% year over year to about 39.9 million. (All graphs in this article are courtesy Stifel.)
The Apple Watch has also shown signs of growth in China, further highlighting just how important the world’s biggest economy is.
Smartphone growth in China a big win for Apple
Non-Android smartphone growth is rising rapidly as well, which of course means good things for Apple as well. Stifel analyst Aaron Rakers and his team report that shipments of non-Android smartphones during the month of July rose 167% from last year and 92% month over month.
They estimate that Android-based smartphones made up about 86% of the total July smartphone shipments in China, a significant decline from 92% in June and 94% in July of last year. This would put non-Android smartphone shipments at about 5.5 million in July. Stifel estimates that during the June quarter, about 17 million non-Android smartphones were shipped.
They estimate that Android-based smartphones made up about 86% of the total July smartphone shipments in China, a significant decline from 92% in June and 94% in July of last year. This would put non-Android smartphone shipments at about 5.5 million in July. Stifel estimates that during the June quarter, about 17 million non-Android smartphones were shipped.
Apple appears to make up the majority of the non-Android smartphone shipments in China, as the company recorded an 87% increase year over year increase in iPhone shipments in Greater China during the June quarter. That put total iPhone shipments toward the high end of Stifel’s previously expected range of between 15 million and 20 million.
Apple overcoming other negative factors in China
The steady smartphone growth in China is especially encouraging for both Apple and other smartphone vendors. The Stifel team notes that most investors and analysts have expected the macroeconomic climate in the company to weigh on the sales of consumer device companies. China’s stock market has been struggling, also causing trouble for the nation’s economy.
Apple CEO Tim Cook said on the company’s June quarter earnings call that they remain “extremely bullish on China” despite the problems there. Participation in the stock market among Chinese households is “fairly narrow,” and there’s still a huge runway for LTE growth as penetration in China is at only 12%.
Apple has been benefiting from the growth of LTE technology as Chinese consumers opt for LTE-capable devices like the iPhone over others. The Stifel team estimates that about 87% of total mobile phone shipments during July were 4G/ LTE devices, suggesting a total of about 39 million units. That represents a 153% increase from last year.
As of this writing, shares of Apple were down 1.59% at $117.82 per share in premarket trading minutes before opening bell.
