China's smartphone shipments for November 2024 experienced a 6% year-over-year (YoY) decline, with a significant 47% drop in iPhone shipments, according to the latest data summarized by Jefferies.
In contrast, Android smartphone shipments saw an approximate 4% YoY increase. This decline in iPhone shipments is estimated to be 17% below the sell-through rate, whereas Android shipments are 33% above their sell-through rate.
The trend of declining smartphone shipments in China has persisted for three consecutive months, primarily due to a significant fall in iPhone shipments, which have seen over a 40% YoY decline each month, attributed to previously high inventory levels.
Meanwhile, Android has demonstrated positive growth in shipments, with a notable 27% increase in October and a 4% rise in November. However, industry checks revealed that Android's sell-through only grew in the low single-digit percentage in October and slightly decreased in November.
Over a six-month rolling period, iPhone's inventory days have only increased by two days, from 21 days to 23 days. On the other hand, Android's estimated inventory days have risen by 11 days from 9 days in October.
The discrepancy between shipment and sell-through rates for Android, coupled with a decline in sell-through in December, raises concerns about potential inventory corrections for Android in the first quarter of 2025.
Adding to the industry's challenges, the National Development and Reform Commission (NDRC) has set the cap for smartphone subsidies in 2025 at Rmb500, which falls short of market expectations. This policy decision is particularly concerning given the weak Android sales in December, despite government subsidies being offered in five provinces and three cities, along with increased discounts from original equipment manufacturers (OEMs).
While government subsidies for smartphones will continue into 2025, there is apprehension that the total amount available will be significantly less than the Rmb100 billion previously reported by local media in November.
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