Apple Market Share Widening
The author is an analyst of NH Investment & Securities. He can be reached at kyuha.lee@nhqv.com. -- Ed.
Chinese smartphone shipments plummeted in July. Local Chinese players are making inventory adjustments in the wake of disappointing 618 Festival (June shopping season) sales. The reduced shipments are stoking predictions of further inventory adjustments. Apple’s market share expansion trend looks set to continue.
Local Chinese smartphone makers adjusting inventories
In July, Chinese smartphone makers’ shipments resumed falling y-y and m-m after a three-month climb. Retail sales during the 618 Festival proved slower than expected, leading to inventory buildups and subsequent adjustments. Moving ahead, iPhone sales should remain healthy, and further inventory adjustments at local Chinese players are expected.
Chinese smartphone shipments fell sharply again in July, dropping to 19.1mn units (-31.2% y-y, -30.5% m-m). Inventory adjustments are still ongoing in response to the recent sluggish retail sales. The decline in sales was particularly sharp for 5G smartphones, which plunged 35.6% y-y. Deterioration is being seen in the Chinese smartphone market in terms of both quantity and quality.
By company, shipments of overseas brands (mostly Apple) plunged 42.6% y-y. Local manufacturers’ shipments slipped 29.3% y-y. Apple iPhone’s 13 series sales are continuing sound, and the new iPhone 14 series is to start rolling out in September.
Concerns over further IT parts inventory adjustments; Apple’s market share to further expand
Overall global component inventories are expanding due to slowing sales in the Chinese smartphone market and a decrease in shipments due to inventory expansion. In the Android camp, unlike the iPhone, we expect smartphone sales to continue to decline due to a lack of innovation. Concerns are in play over potential increases in inventory adjustments at parts makers such as Samsung Electro-Mechanics.
In contrast, the iPhone’s share of the Chinese market should continue to widen. In detail, Apple’s Chinese market share has upped from 10% to 16.3% as of late, led by stronger-than-predicted sales of the new iPhone 14 Pro series. Apple-related companies such as LG Innotek, BH, Innox AMC, Hy-Vision System, and Dukwoo Electronics are all well situated to be mid/long-term beneficiaries of this trend.