China reports record sales and 33% growth in non-Android smartphones, casts doubt on 'peak iPhone'

AppleInsider · January 13, 2016 12:02AM

China's Ministry of Industry and Information Technology has released data showing a significant drop in Android's share of smartphone sales in the December quarter, leaving a 33 percent gain for non-Android smartphones, a segment dominated by Apple's iPhone.

Source: MIIT, Stifel

Stifel analyst Aaron Rakers reported on China's MIIT data release, as noted by Philip Elmer-DeWitt of Fortune in his analysis of iPhone sales.

Android was reported by China to have accounted for 81 percent of the nation's smartphone sales in the December quarter, down from 82.5 percent in the year-ago quarter, and substantially below the 88 percent share reported during the September quarter.

That means non-Android smartphones increased significantly, achieving a new record of 24.3 million units, up by a third from the year-ago quarter's 18.3 million in sales and up even more from the 14.5 million units sold in the September quarter. Apple's iOS represents 90 percent of non-Android smartphones in China

Apple's iPhone accounts for virtually all of the non-Android phones sold in China. According to independent data compiled by Kantar WorldPanel, the total share of BlackBerry, Windows, Tizen and all other platforms accounted for just 2.5 percent of China's smartphone sales. Kanter's data indicates that Apple's iOS represents 90 percent of non-Android smartphones in China.

Further, Kantar reported that outside of iOS, the market share of other non-Android platforms slipped between the data reported for September and October (the latest it has published) That further reinforces that any growth in China's non-Android smartphone sales were the result of an iPhone sales expansion.

In September, Apple's chief executive Tim Cook noted that the company was on track to exceed its 74.5 million iPhones sold in the previous December quarter. However, since then a series of supply chain rumors have asserted that Apple would cut orders from its suppliers in the March quarter, inciting a panic surrounding the idea that iPhone 6s sales are troubled.

A series of smartphone suppliers have also warned of worse than expected results for the December quarter, but their troubles may likely be linked to another supplier: Samsung, which has itself warned investors to expect poor smartphone performance under increased competitive pressure.

Apple has repeatedly warned that rumors of supply chain cuts do not and can not provide a clear picture into the company's operations. Previous rumors floated by the Wall Street Journal and Nikkei of supposed supplier cuts as large as 50 percent did not result in any observable change in the number of iPhones that were actually sold.

anantksundaram · January 13, 2016 12:07AM

Heh heh.... I think there's still time to buy....

bobschlob · January 13, 2016 12:38AM

I dunno... Somehow 80+% of phone sales being Android doesn't make me feel all warm and fuzzy.

foggyhill · January 13, 2016 12:47AM

bobschlob said:

I dunno... Somehow 80+% of phone sales being Android doesn't make me feel all warm and fuzzy.

Their not Google's Android.... At least the part they care about... That should make you feel better.

fallenjt · January 13, 2016 12:52AM

WS anal ysts can eat shit now.

jax44 · January 13, 2016 12:55AM

fallenjt said:

WS anal ysts can eat shit now.

They already have, thus their shiteating grins.

linkman · January 13, 2016 1:00AM

USA here. I have yet to see a Windows or Tizen phone "in the wild" and I haven't seen a BBY phone in use in the last 4 years.

sirlance99 · January 13, 2016 1:56AM

linkman said:

USA here. I have yet to see a Windows or Tizen phone "in the wild" and I haven't seen a BBY phone in use in the last 4 years

Tizen isn't sold at all in the US so that's why you haven't seen them. Windows has a lower percentage market share in the US compared to places like the UK which is higher. You'd see Windows phone there although rarely. Seriously, 4 years you haven't seen a BlackBerry phone. You must live under a rock. Yes they are few and far between but 4 years seems a little far fetched to me. I see one at least every week but I'm around business people all day every day. iPhones and Samsungs are what I see mostly with a speckle of LG in there. For the most part iPhones are the most followed by Samsung.

michael scrip · January 13, 2016 2:02AM

bobschlob said:

I dunno... Somehow 80+% of phone sales being Android doesn't make me feel all warm and fuzzy.

Yes... 80 out of 100 smartphones sold in China are running some version of Android.

But 40 of those 80 are under $100 models. All told... the average price of an Android smartphone in China is around $200. So are you really that surprised when Android makes up 80% of smartphone sales in China?

If you want to evaluate the iPhone's adoption in China... remember that the average price of an iPhone in China is over $600.

Cheap Android phones sell in huge volumes... and thus have higher market share.

And Apple doesn't do cheap.

lkrupp · January 13, 2016 2:34AM

bobschlob said:

I dunno... Somehow 80+% of phone sales being Android doesn't make me feel all warm and fuzzy.

That’s because you have a Debbie Downer personality and see negativity in everything. What does it matter how many Android phones were sold if non-Android (90% iPhones) sales rose 33%? Android sales were DOWN almost 7%. Thats’ means non-Android phones are growing.

lkrupp · January 13, 2016 2:37AM

It’s starting to look like the “pump and dump” scam artists are moving into another “pump” phase. I guess they got AAPL down far enough to start buying again.

sflocal · January 13, 2016 3:50AM

lkrupp said:

It’s starting to look like the “pump and dump” scam artists are moving into another “pump” phase. I guess they got AAPL down far enough to start buying again.

People (including me) really criticize the analysts with how wrong they are, however I think they are all just grinning simply because they are "pumping and dumping" and walking to the bank. They know it works, it gets them results, and unless the SEC gets some balls and goes after them, there's no reason to stop what is essentially an easy meal-ticket.

yojimbo007 · January 13, 2016 3:54AM

Major thumbs up..... Anal-ists arsss

radster360 · January 13, 2016 4:23AM

How many times have been seen this before? Wall Street will scare everyone with their supply chain crap and drive Apple down, even after they have been told that don't try to read into Supply Chain information as it is a complex process, especially when you are dealing with multiple suppliers, product change, etc. But NOOOO! Wall Street will continue spewing their crab.

MarkteWatch, CNBC, WSJ will take this story and claim that Chinese reports cannot be trusted upon and manipulate their way and try to bring the market and AAPL down. Not just that, they are now suggesting that current market dull drum has also lot to do with Fed increasing rates. Wall Street is still looking for that free money - http://www.cnbc.com/2016/01/12/now-you-know-why-the-fed-feared-a-quarter-point-hike.html

jonl · January 13, 2016 5:03AM

radster360 said:

How many times have been seen this before? Wall Street will scare everyone with their supply chain crap and drive Apple down, even after they have been told that don't try to read into Supply Chain information as it is a complex process, especially when you are dealing with multiple suppliers, product change, etc. But NOOOO! Wall Street will continue spewing their crab.

It's different this time due to (a) the sheer number of suppliers reporting lackluster quarters and guidance and (b) sole suppliers of chips that go into every iPhone and iPad warning or conforming to (a), e.g. Cirrus Logic and Dialog, who derive 70% and 80% of their business from Apple, respectively. These are facts, not rumors. The question now is, how much of it is due to Apple slowdown vs other slowdown?

Also, one could note the striking deceleration in YoY quarters above from 200% (2nd and 3rd) to 33% (4th) and worry about Q12016, which would seem to fit with what the suppliers have been reporting.

cali · January 13, 2016 5:25AM

sflocal said:

lkrupp said:

It’s starting to look like the “pump and dump” scam artists are moving into another “pump” phase. I guess they got AAPL down far enough to start buying again.

People (including me) really criticize the analysts with how wrong they are, however I think they are all just grinning simply because they are "pumping and dumping" and walking to the bank. They know it works, it gets them results, and unless the SEC gets some balls and goes after them, there's no reason to stop what is essentially an easy meal-ticket.

I'm sold analyst's only job is to manipulate stock and that is it. I bet they buy AAPL themselves.

serendip · January 13, 2016 5:52AM

sog35 said:

jonl said:

It's different this time due to (a) the sheer number of suppliers reporting lackluster quarters and guidance and (b) sole suppliers of chips that go into every iPhone and iPad warning or conforming to (a), e.g. Cirrus Logic and Dialog, who derive 70% and 80% of their business from Apple, respectively. These are facts, not rumors. The question now is, how much of it is due to Apple slowdown vs other slowdown?

Also, one could note the striking deceleration in YoY quarters above from 200% (2nd and 3rd) to 33% (4th) and worry about Q12016, which would seem to fit with what the suppliers have been reporting.

Compare Cirus logic Sept 2014 quarter revenue vs 2015.....

no. It isnt different this time. Apple simply ordered parts earlier this year.

I'm more of the opinion that the sheer number of suppliers (all 3 of them) reporting lackluster quarters are 1) too small a sample size and 2) probably losing most of their sales due to loss of android volume. Analysts just assumed it was Apple because Apple impacts the suppliers more but a collapse in android phones can hurt them just as badly.

jonl · January 13, 2016 5:58AM

sog35 said:

Compare Cirus logic Sept 2014 quarter revenue vs 2015.....

no. It isnt different this time. Apple simply ordered parts earlier this year.

Like I said, my "very different" was due to multiple suppliers reporting and warning about various things instead of just analysts spreading rumors from unnamed sources, but as concerns Cirrus in particular, it's also very different this time. Cirrus enjoyed Samsung using Exynos and thus the Wolfson codec for North American and European Galaxy S6 which accounts for some of their YoY increase. That's likely been restored to normal for the S7 line, with Qualcomm getting the codec for those models, but then again. Cirrus would have had this Samsung info when they released their guidance in late October, and they have consistently been lowballing their guidance somewhat. For them to miss their own guidance was startling, and as they said, the warning was due to late December developments, and this suggests the miss is due to Apple, and it's all the more disconcerting given their increased content, i.e. the additional amp in the iPhones 6s. That said, it's always possible Apple killed them on ASPs again, but that could only be part of it.

delreyjones · January 13, 2016 6:14AM

jonl said:

Like I said, my "very different" was due to ...

You haven't convinced me that things are any different this year. One thing that's definitely the same amongst you Supply Chain Tea Leaf Analysts is your level of confidence. You sounded 100% confident last year and it's the same this year. Time will tell.

One thing I'm curious about is how many AI readers who are also investors have become scared enough to sell in this last season of concern? Count me as one who is indeed concerned (I'm not nearly as confident as the Tea Leaf experts), but not concerned enough to sell. I've never regretted holding AAPL, but I did sell a little a few years back which I soon regretted. I definitely don't try to judge the peaks and valleys, that's close to insanity, but buying and holding has worked very well.

Any AI readers who haven't gotten worried and sold due to all of these naysayers? Speak up and be counted!

jonl · January 13, 2016 6:50AM

delreyjones said:

jonl said:

Like I said, my "very different" was due to ...

You haven't convinced me that things are any different this year. One thing that's definitely the same amongst you Supply Chain Tea Leaf Analysts is your level of confidence. You sounded 100% confident last year and it's the same this year. Time will tell.

You might try reading past the part you clipped to understand better. I've always been a critic of the rumors, but it's not just rumors this time. I explained all that (twice!), and to include me as a "Supply Chain Tea Leaf Analyst" is plainly fatuous. Your post is nothing but a content-free ad hominem attack.

delreyjones · January 13, 2016 7:26AM

jonl said:

delreyjones said:

You haven't convinced me that things are any different this year. One thing that's definitely the same amongst you Supply Chain Tea Leaf Analysts is your level of confidence. You sounded 100% confident last year and it's the same this year. Time will tell.

You might try reading past the part you clipped to understand better. I've always been a critic of the rumors, but it's not just rumors this time. I explained all that (twice!), and to include me as a "Supply Chain Tea Leaf Analyst" is plainly fatuous. Your post is nothing but a content-free ad hominem attack.

The content of my last post is that your confidence looks the same this year as last year (and by ‘you’ I mean any one who relies on supply chain analysis to predict bad numbers for APPL). You get down into details about suppliers that I’m skeptical about, but I’m not energetic or motivated enough to study. Tim Cook has told us to ignore the supply chain analysts and he’s the more trustworthy source. You’re too confident in your analysis and predictions. That confidence damages your credibility.

Horace Dediu does not come across as confident as you, but his analysis has an excellent track record. His CapEx Forecast and its correlation with iOS Shipments is both easier to understand and more believable that the supply chain stuff. And he presents it with humility. I understand you guys are focusing on the March quarter and Horace’s work is looking at the entire year, but that speaks to the difference between speculators and investors.

China reports record sales and 33% growth in non-Android smartphones, casts doubt on 'peak iPhone'

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