Investing.com – Analysts at Evercore Partners Inc (NYSE:) recently provided a detailed look at the performance of the Chinese smartphone market, highlighting the second straight month of accelerating shipments. According to the analysis, the market saw a significant year-on-year increase of nearly 29% in April, a notable improvement compared to the 5.5% contraction in March.
Data provided by the China Academy of Information and Communications Technology (CAICT) indicates that shipments by multinational companies, mostly Apple Inc. (NASDAQ:), rose nearly 52% year-on-year, totaling 3.5 million units. This is a significant acceleration compared to the 12% growth recorded in March. The increase in shipments is likely a result of channel restocking after MNC shipments fell by about 27% in the first quarter.
This rise should allay investors' concerns regarding the risks of Apple's market share in China. While Huawei is becoming increasingly competitive in the high-end market, its gains appear to come primarily at the expense of other players. Apple reported that iPhone revenue in mainland China remained stable year over year in the first quarter.
Apple has reportedly used discounting via third parties to help maintain market share. However, these discounts appear to be relatively limited in scope, being available for about a week of the quarter in February and May. It's still unclear how much of a discount Apple offers to third parties.
Apple accounts for more than 90% of multinational enterprise shipments, making it a reasonable proxy for understanding market trends now that shipment data is no longer broken down by operating system. In conclusion, it appears that Apple's market performance in China is much better than expected. If the Chinese market remains relatively stable, Evercore ISI expects that emerging markets, coupled with the AI supercycle, could lead to strong growth for the iPhone in FY25 and beyond.
Evercore ISI maintains an “Outperform” rating on Apple, with a price target of $220.