Chinese smartphone shipments continue to fall although iPhone deliveries rose last month

In a note to investors seen by AppleInsider, brokerage firm Goldman Sachs analyzed smartphone data compiled by the China Academy of Information and Communications Technology (CAICT). The numbers revealed that November smartphone shipments in China.amounted to 29.6 million units last month, down 15% from last year. On a sequential basis, shipments rose 13% from October. Shipments of international brands, of which Apple is believed to be the leader, were up a whopping 99% to 6.9 million units last month from the same month in 2019. From October 2020 to November 2020, international shipments rose 18%.

The aforementioned 15% decline in November smartphone shipments in China compares to year-over-year declines of 13%, 36%, and 27% for August, September, and October respectively. Goldman's Rod Hall said that despite strong demand for 5G enabled phones, the overall smartphone market was weak in the country. Hall told clients, "We see these ongoing weak trends as interesting given Chinese 5G units have been better than we expected but not enough to offset the very weak overall demand environment."

According to Goldman Sachs, Apple iPhone deliveries in China were up during November. In the investor note, Hall stated, "In our opinion, the overall market weakness that we continue to see in China may be beginning to translate into higher end demand stagnation at Apple. We also note that lower end market strength in China is important for absorption of refurbished/2nd hand iPhones which could have a negative effect on device resale pricing and the trade-in value that new iPhone buyers experience."

Hall is bearish on Apple and expects the price of the stock to drop from the current $122.10 to $75 over the next 12 months. That would be a 39% decline; the analyst maintains his "sell" rating on the stock. While the consensus expects Apple's first 5G iPhone models to generate growth in China, Hall says that year-over-year growth "may not be as pronounced as many investors believe it will be in the iPhone 12 cycle."