Checking iPhone shares in China, analysts send notes ahead of Apple earnings, and HomePod starts playing hard to get.
iPhone, Market Share, and Apple Shares
Counterpoint: As Smartphone Sales Sink in China, Apple’s Share Grows
While smartphone sales were down in China for 2022, Apple’s market share was up — that is the word from Counterpoint Research. According to the market tracker, iPhone sales for the year were down 3%. That’s significantly better than smartphone sales in China as a whole. For the full year, those were down 14%. Apple’s performance was enough to make it the #2 brand in China — the first time it’s held second for a full year, according to Counterpoint. “It also reached its highest-ever quarterly share,” according to the piece, “capturing 23.7% of the sales in Q4 2022.”
The firm lists two primary reasons for China’s smartphone decline: COVID related restrictions, followed by COVID related COVID. “Since the spring of 2022,” says the Counterpoint release:
…many cities in China, both large and small, were being subjected to COVID-19 restrictions, which negatively impacted consumer sentiment and further delayed smartphone replacements.
Sales got a bit of a bump in November, thanks to promotions tied to the country’s Single’s Day sales holiday. Momentum didn’t stick though. The sudden reversal of COVID restrictions led to the rapid spread of the illness, leading to a dampening of consumer spending. Going forward though, things might get better. Counterpoint says, “China’s smartphone sales may show a positive YoY growth in Q2 2023, when the country should have restored normal social activities.” That said, the firm warns that:
…consumer sentiment will take longer than the economy to recover, particularly when it comes to income prospects. Therefore, [the firm does] not expect any explosive growth in smartphone sales this year. But a marginal recovery can still be expected.
Evercore: Recovering Luxury Spend in China is Good Indicator for Apple
Of course, the well heeled still have money to spend. And a new note from Evercore analyst Amit Daryanani says they are spending. Apple 3.0 ran part of a note from the analyst. That had a few luxury brands, including LVMH, Burberry, and “luxury goods holding company” Richemont seeing positive signs for the quarter. “In Macau,” said LVMH, “the change is quite spectacular. The stores are full. It’s really come back very, very strong pace.” Burberry says things are “very promising,” while Richemont said it was “experiencing a strong retail rebound pre-Chinese New Year.”
What does all of this have to do with Apple? Daryanani and crew see the news as encouraging for the Cupertino-company, “as iPhone sales should generally track the broader luxury market in China.” The analyst says he and his:
…expect the lost Dec-qtr sales to be recovered in Mar-qtr and the data points on [luxury spending] increases our confidence that Apple’s Mar-qtr guide will be comfortably ahead of consensus.
Daryanani has an “Outperform” rating on Apple shares. His price target on the shares is $190.
BofA Drops Apple Target by $1
Years ago, I gave Citi analyst Jim Suva the nickname “Dollar” Jim Suva because he wrote a whole note justifying moving his price target on Apple shares by a buck. I’ll not do the same for BofA analyst Wamsi Mohan, though he did the same as Suva to end the week last week.
Apple 3.0 ran part of a note he wrote. According to that, he and his think Apple will report revenue of $120B for the December-quarter, below the Street’s expectation of $122B. As for the March-quarter, they expect guidance or color or whatever Apple calls it of $96B in revenue, below the Street’s expectation of $97B.
The fact that iPhone supply has caught up with iPhone demand bodes ill, in Mohan’s estimation. It leads he and his “to conclude that demand could be softer than expected in 1H23.” It’s not so much that he’s negative, he just can’t find reason to be positive. Not that he’s not open to it. The way he sees it:
The tone on [Apple’s next earnings] call will be crucial to understand the underlying demand trajectory given the Dec qtr was significantly supply constrained for the higher end Pro models of iPhones.
Mr. Mohan has a “Neutral” rating on Apple shares. He’s moved his price target on the shares from $154 to $153.
“Eight Bits” Mohan? I don’t think that’d stick.
Wedbush: Apple Well Position to Weather Economic Uncertainty
Earnings season is underway, and Wedbush analyst Daniel Ives says this week’s report from Apple will be the most important. In yet another bit posted by Apple 3.0 Ives says that’s because Apple’s report “will give a glimpse into the overall demand story for consumers globally while giving a snapshot of the China supply chain issues starting to slowly abate.” He says the Street will be “laser focused on [Apple CEO Tim] Cook’s commentary for the March/June quarters.”
While he thinks Cook & Co. will be particularly conservative around March-quarter guidance, he thinks Apple is well positioned for troubles ahead. Taking a position similar to positions he’s taken in the past, Ives says:
With roughly 20% of its golden installed base not upgrading their iPhone in ~4 years we believe Apple remains in a unique situation to withstand this economic storm better than its tech peers. Apple will likely cut some costs around the edges, but we do not expect mass layoffs from Cupertino this week.
Mr. Ives has an “Outperform” rating on Apple shares. His price target on the shares is $175.
Apple’s Q1FY23 Earnings Set for Thursday, February 2
Whatever Apple plans to offer in the way of guidance or color or tea-leaf reading or whatever — the world will hear it soon. Apple is set to report December-quarter earnings this Thursday, Feb. 2. The numbers will hit via press release after the bell ~4:30 EST/1:30 PST. About half-an-hour later, 5:00 EST/2:00 PST, Apple execs and Apple analysts will hit the phones for their quarterly Q&A. You can hear that as it happens on Apple’s site. It’ll be made available as a podcast soon after. And — of course — we’ll hit points big and small right here on Friday, Feb. 3.
Apple Wait Times for 2nd-Gen HomePod Stretch 2-4 Weeks
Maybe it was a “don’t know what you’ve got ’til it’s gone” thing, but waits are increasing for the full-size HomePod. For the past couple of years, if you wanted a big HomePod you either had to find one pre-owned or do without. Apple announced an improved, full-size HomePod about a couple of weeks ago. Due to consumers this Friday, Feb. 3, if you want to order one from Apple — you’ll not be getting it this Friday.
A piece from 9to5Mac written Sunday said that waits for the second-generation HomePod in the Midnight hue were showing delivery between Feb. 22 and March 1 — a 3-week to 4-week delay versus the Friday release. At the time the piece was written, it was still possible to get the White one by this Friday, though that has since changed. By late Sunday afternoon/early Sunday evening, free delivery on the White model showed between Feb. 20 and Feb. 22. Pay an extra $8 and you could move that up to between Feb. 17 and Feb. 21.
Of course, you could try dropping by an Apple Store or an Apple Authorized Reseller. The website for my local BestBuy indicated that, had I pre-ordered Sunday, I’d be able to pick up a Midnight or White model this Friday. Target was a bit more vague, saying if I pre-ordered Sunday it would be delivered “on or shortly after release date…”
Anyway — the new HomePod is playing hard to get. Happy hunting.
Surf’s Up (Again) on Apple TV+
You know how it feels like everything is turning up soccer at Apple? It’s starting to feel that way about surfing, too. Apple TV+ issued a press release last week teasing season-two of “Make or Break.” According to that, the “acclaimed documentary series” features “behind-the-scenes access to the world’s best surfers as they battle for the top title at the World Surf League Championship Tour…” Eight-episodes total for season-two. The first-four hit Apple TV+ on Friday, Feb. 17. The other four follow along one week later, reaching the beach on Friday, Feb. 24.
Apple Watch Named Official Wearable of World Surf League
While you may not see much Apple kit in season two, don’t be surprised to see more than a few Apple Watches in the third season (assuming there is a third season). MacRumors ran a report late last week saying that Apple Watch has been named the official wearable of the World Surf League. “During the 2023 Championship Tour,” MacRumors says:
…WSL athletes will use the WSL Surfer app on the Apple Watch Series 8 and the Apple Watch Ultra to get updates while they’re surfing in the competition. The app is designed to sync with the WSL Scoring System in real time, offering athletes important details on scores, wave priority, and time remaining in the heat.
It’s possible you will see Apple’s wearable in the second season. MacRumors says the device/WSL app combo has been in testing for the past couple of tours. As for seeing it in the future — that sounds like a definite thing. MacRumors says each “competitor will receive an Apple Watch before each heat, with the watch to come preloaded with the WSL app.”
Today on The Mac Observer’s Daily Observations Podcast
T.D.O.O.G. Jeff Gamet has a bone to pick with the likes of Siri and Alexa. Basically, he thinks they should be better. He joins me to talk about how and why. Plus — I have questions about Mastodon. Jeff has answers. That’s all today on The Daily Observations Podcast from The Mac Observer.