Apple Inc. (AAPL) - Get Report shares traded higher Tuesday after data suggest that the tech giant's iPhone shipments in China surged last month as the world's biggest smartphone market began to slowly re-open after its coronavirus pandemic.
China's government-backed Academy of Information and Communications Technology, known as CAICT, said Apple's March iPhone shipments rose to around 2.5 million in March, a five-fold increase from February, as third-party retailers came back online following coronavirus-lead shutdowns in the world's biggest smartphone market.
Apple is expected to ship around 197 million iPhones this year, according to Street estimates, and is reportedly planning to launch a 5G version of the handset, as well as lower-priced models, later in the fall, leading to an acceleration in sales for 2021.
"While we believe consensus estimates are too high given the near-term impact to supply and demand and potential for weaker long-term sales given the economic impact of the pandemic, we note our 2021 estimates could prove conservative given the loyal Apple customer base and potential new products and recovering global economies could drive strong upgrade sales," said Canaccord Genuity analyst T. Michael Walkley, who carries a buy rating on the stock with a $300 price target. He is also forecasting 2021 iPhone sales of 181 million units against a Street consensus of 212 million.
Apple shares were marked 3.4% higher in early Tuesday trading to change hands at $282.96 each, a move that would trim the stock's two-month decline to around 13%.
Apple was one of the fist blue-chip companies to highlight the potential impact of the coronavirus pandemic when it scrapped its second-quarter revenue guidance in February and noted that iPhone shortages would affect the tech giant's near-term sales.
Apple had said on January 29 that it expected revenue in the range of $63 billion to $67 billion. It was firmly ahead of the Wall Street consensus of $62.4 billion, but is also a much wider range than the company typically provides.
Apple said at the time that all of its stores in China, as well as many of its partners' stores, were closed amid the outbreak, which was first identified in the central industrial city of Wuhan. Those that were eventually re-opened, Apple said, "are open have been operating at reduced hours and with very low customer traffic."