Analyst: ‘We estimate that Apple had a poor Q2’

BMO’s Tim Long forecasts a 21% year-over-year decline in June quarter iPhone unit sales.

From a note to clients that landed in my inbox Tuesday [boldfacing mine]:

Catalyst: Government data shows China handset shipments of 36.6 million in the month of June, down 12% y/y. Recall that last month was the first y/y increase (+1%) since February 2017. Units were down 3% month/month, better than normal seasonality of about down 5%. Smartphones showed similar growth dynamics, as they now represent 96% of shipments. For the June quarter, China units rebounded nicely off the very low March quarter, increasing by 24%, but still falling 10% year/ year. We estimate that Apple had a poor Q2, with units down 21% year/year and 29% sequentially. Domestic brands gained about 500 bp of market share in Q2. Year to date, China units are down 18%, after falling 12% in 2017.

Impact. While China has been improving off the bottom, it will likely be some time before we see sustainable growth. Apple units dropped more than usual in June, and we estimate a year-to-date drop of 16% for iPhone units, though we suspect that ASPs have risen. We believe QCOM’s chips business is more stable in China, though the slightly better results from Mediatek could mean that their share is recovering. We believe Samsung continues to feel market share pressure in China.

Left unchanged: Market Perform rating and $171 price target.

My take: I wonder if BMO’s clients have noticed that Apple is trading in the 190s.