China smartphone shipments leveling out after two months of rebounds

Shipments of smartphones in China, including both international and domestic brands, appear to be moderating after two months of rebounding from earlier coronavirus impacts.

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.

Credit: JP Morgan

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.

Credit: JP Morgan

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.