China smartphone shipments leveling out after two months of rebounds

In a note to investors seen by AppleInsider, JP Morgan analyst Samik Chatterjee says that smartphone shipments in China appear to be leveling out following two months of strong rebounds from coronavirus-related drops in March and April. Chatterjee has drawn his conclusions from smartphone shipment data for the month of May released by the state-controlled China Academy of Information and Communications Technology (CAICT).

Specifically, Chatterjee notes that overall smartphone shipments in China fell 12% year-over-year to 33 million units in May. More specifically, Domestic Chinese smartphone shipments declined 11% and international brand shipments fell 15% in that period.

Breaking those numbers down further, CAICT data shows that international smartphone shipments dropped from 3.7 million units in April to 2.8 million units in May — a 24% decline.

International shipments clocked in at 2.9 million units in March, half a million units in February, and 2.5 million units in January. Data shows that foreign smartphone brands are still up 4% on a year-to-date basis.

The overall "weakness" in the month of May leads Chatterjee to theorize that smartphone recoveries for the past two months were "likely partly assisted by pent-up demand in the region from the earlier months."

"In hindsight, the challenges in driving a straight line V-shaped recovery in volumes is likely one of the drivers leading to third-party online retailers to take price cuts on iPhone recently," the analyst wrote.

China is a critical market for Apple. Chatterjee has long maintained that COVID-19's effects on smartphone shipments is a temporary speed bump for Apple.

During its most recent earnings call, Apple CEO Tim Cook corroborated that the company was seeing improvement in China in April as economic conditions eased.