Report: Apple likely sold more iPhones in China than in the U.S. last quarter

Apple (NASDAQ: AAPL) likely sold more iPhone units in China in its most recent quarter than it did in the United States, according to a Financial Times report. If the report proves accurate, this would be the first time iPhone sales in China have outpaced those in the U.S. market.

The report, citing data from financial analysts at UBS, said the analysts estimate that China accounted for 36 percent of Apple's iPhone shipments in the most recent quarter, its fiscal first quarter, compared with 24 percent in the U.S. In the year-ago period, 29 percent of Apple's iPhone sales were in the U.S. and 22 percent were in China, according to UBS.

Creative Strategies analyst Ben Bajarin estimated that Apple sold 2 million more iPhone units in China than it did in than North America during the last quarter, according to the FT. If China did overtake the U.S. in terms of quarterly iPhone sales, it would not be too much if a surprise. Indeed, Apple CEO Tim Cook said in 2013 that he expected China to eventually surpass the U.S. as Apple's single largest source of sales.

Apple reports its quarterly earnings after the market closes on Tuesday.

The smartphone boom in China speaks to both the growing middle class there, the surging demand for smartphones (especially from domestic suppliers like Xiaomi, Lenovo, Huawei, ZTE and OnePlus), and the continued rollout of LTE networks.

Beyond China, investors are keen to see Apple's global iPhone sales in its most recent quarter, which ended Dec. 27, because it's the first full quarter of iPhone 6 and 6 Plus sales. A report from Consumer Intelligence Research Partners found that the iPhone 6 and 6 Plus models accounted for three-quarters of all iPhones Apple sold in the quarter, with iPhone 6 at 45 percent and iPhone 6 Plus accounting for 30 percent of sales. CIRP estimates the iPhone 5S accounted for around 14 percent of sales and the iPhone 5C accounted for the remaining 11 percent. However, Apple executives likely will not divulge the model breakdown of iPhone sales during the company's quarterly earnings conference call.

"The iPhone 6 and 6 Plus showed continued strength after the powerful launch at the end of the third quarter," CIRP partner and co-founder Josh Lowitz said in a statement. "Apple introduced a new higher price point with the iPhone 6 Plus, and with new pricing sold more units at higher storage capacities. We expect the average selling price to increase nicely when they report earnings on January 27."

According to Yahoo News, a Bloomberg analyst survey predicts Apple sold 65.5 million iPhones last quarter, while Fortune Magazine's quarterly survey, which includes estimates from professional and amateur Apple analysts, also came in at 66.5 million. However, KGI Securities analyst Ming-Chi Kuo, who has a fairly strong track record in predicting Apple sales, predicted that Apple sold 71.5 million iPhones in the quarter.

In other news about the Chinese smartphone market, Lenovo's Motorola Mobility unit, which is returning to the Chinese market following the close of Lenovo's $2.9 billion deal for Motorola, is confident about its chances in the highly competitive market.

The (Chinese) market itself is so big here and Motorola has no share today, so we believe that what we're really going to succeed in doing is hopefully take some share from other people in the market," Motorola President Rick Osterloh told Reuters. Motorola will go head-to-head in China with Apple and Samsung Electronics in the premium smartphone market and with Xiaomi and others in the mid-range and low-end market.

"Our approach is to have global products tailored and customized for local markets," Osterloh said, adding that Motorola will also stick to selling relatively high-end products in China.

For more:
- see this FT article (sub. req.)
- see this Yahoo News article
- see this Barron's article
- see this CIRP release (PDF)
- see this Reuters article

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