- China's recent surge in Covid cases jeopardizes the leading smartphone market, while Apple Inc (NASDAQ: AAPL) could still shine, analysts told CNBC.
- China reported over 20,000 Covid infections leading to a countrywide lockdown hindering logistics and consumer spending.
- China tried to keep the factories running to reduce disruption.
- Also Read: Apple iPhones Led Smartphone Sales As 5G Handsets Formed Over 50% Of Sales
- Analysts see up to a 20% year-on-year decline in smartphone shipments in Q2.
- The weaker momentum of the Android market was a key reason behind the decline. Multiple brands (like Xiaomi) fought fiercely on price for a piece of a shrinking Android pie.
- Analysts think Apple could see a decline of 4% - 5% in shipments in Q2 partly due to seasonality as Apple released its newest products toward the end of last year.
- Apple could see some growth in Q2 as it continues to capitalize on the decline of Huawei in the premium end of the market.
- Analysts saw Apple grow its overall market share in China in 2022 as its loyal and affluent fans upgraded to new or budget-friendly 5G models.
- China's discount shopping event in June could also see a recovery in smartphone shipments.
- However, the continued Covid surge could lead to a market drop as low as 12% year-on-year.
- Price Action: AAPL shares traded lower by 0.44% at $171.07 premarket on the last check Thursday.
