iPhone leading the charge for China smartphone market recovery

Following one research firm's report that renewed demand for the iPhone could kickstart China's smartphone market recovery, UBS believes that has already begun. Previously, UBS estimate that Apple's recovery from manufacturing delays in December was insufficient, but now it says the company did better than expected.

"While local brand shipments improved 21% Nov to Dec," the analysts say in a report seen by AppleInsider, "iPhone shipments far outpaced the local brands increasing 88% month-over-month and +20% YoY in December vs a 58%/57% MoM/YoY decline in November."

"[However, while] the iPhone sell-in strength is encouraging, it is important to note that sell-in during the fourth quarter was down ~28% owing to the well documented disruptions in October and November," continued the analysts. "That said, the December data should alleviate investor concerns that material supply chain disruptions continued into 2023."

Noting that "Apple shipments materially recovered in December," UBS says that across the whole of the fourth quarter, the iPhone declined more than rivals. Local brands were down around 23% YoY, while Apple was down approximately 28% YoY.

"However, on a full year basis, local brand shipments in China declined 25% compared to a ~9% decline for Apple," it continues.

UBS has not changed its prediction of how well the iPhone will sell in Q123, it says it may be underestimating Apple.

"While the aggregate shipment data on the margin does not change our March iPhone forecast," say the analysts, "we note that the recovery in shipments in December and initial sell-through checks suggests our 52M iPhone unit estimate could be conservative (Consensus 55M)."