Ahead of the December-quarter earnings to be released today, Counterpoint Research reveals that iPhone maker Apple (NASDAQ: AAPL) won back its top spot in China after a long six years. This might offer some respite to investors, as shares of the company tumbled over the past month, recording losses of over 11%.
According to market research data from Counterpoint Research, Apple outperformed its competitors in the final quarter of 2021, as its smartphone market share reached a record high of 23% in China. Quarterly sales grew 32% year-over-year, driven by the post-pandemic rebound in demand and the wide acceptance of its iPhone 13 series.
Meanwhile, total smartphone sales in China fell 9% in the quarter, amid chip shortages and an economic slowdown that restricted both production and consumer demand.
Prior to the latest achievement, Apple grabbed the title of China’s top-selling smartphone brand in Q4 2015, with the launch of its iPhone 6. At the time, Chinese customers were tempted by the large screens the iPhone offered.
In 2021, Apple stood as China’s third best-selling smartphone brand, grabbing a market share of 16%. The company recorded a 47% year-over-year rise in unit sales, though overall smartphone sales declined 2% in China.
Vivo and Oppo, the two Android handset brands, ranked first and second, with 22% and 21% market share, respectively.
Results for Apple’s December quarter sales are expected to reflect supply-chain issues that are due to disruptions caused by COVID-19.
Apple CEO Tim Cook told Reuters that “we’re doing everything we can do to get more (chips) and also everything we can do operationally to make sure we’re moving just as fast as possible.”
Meanwhile, Apple CFO Luca Maestri expects “very solid” December quarter sales, with gross margins in the range of 41.5% to 42.5%.
In a positive sign, over the nine months ended September 30, 2021, Apple recorded revenue of more than $282 billion, with iPhone sales contributing almost 39% in the third quarter.
Still, certain macroeconomic factors, including inflationary pressures, economic downturn, and persistent chip shortage, remain concerns for both demand and supply.
Wall Street’s Take
Ahead of the Fiscal first-quarter 2022 upcoming earnings, Bank of America Securities analyst Wamsi Mohan maintained a Buy rating and a price target of $210 (31.5% upside potential) on Apple.
Mohan expects Apple to report strong results in the December quarter on the back of an improved supply of higher-end phones, including the iPhone 13 series. Consequently, he increased his estimates to 81 million iPhone units for the to-be-reported quarter, better than the Street’s estimate of 80 million units.
The analyst anticipates the iPhone maker will report revenue and EPS of $121 billion and $1.90, respectively, in Fiscal Q1.
Consensus among analysts is a Strong Buy based on 22 Buys, 4 Holds, and 1 Sell. The average Apple stock forecast price of $181.40 implies 13.6% upside potential from current levels.
Apple Website Users
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Apple’s performance in the December quarter.
According to the tool, the Apple website recorded a 17.95% decrease in global visits in December compared to the same period last year. Also, the December quarter showed a fall of 17.75% compared to Q1 2021. This, in turn, indicates the company might report a decline in Q1 2022 top-line results as a whole.
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