Analyst: Chinese Golden Week phone sales weak

Apple’s iPhone XS Max sales are holding up, according to Rosenblatt’s Jun Zhang. The Chinese also-rans—and the iPhone XS—not so much.

From a note to clients that landed on my desktop Wednesday morning:

During China’s Golden Week (October 1-October 7), we tracked several large consumer retail channels. The data indicates that smartphone sell-throughs were down 7% y/ y, in terms of units, during the holiday week.

iPhone XS sales continued to be weak, while iPhone XS Max sales remained steady, around three times that of iPhone XS sell-throughs. The 512G iPhone model accounted for 50% of overall sell-through in China. Although Apple (AAPL: Buy) has not made any adjustments to its iPhone production, we expect there to be some cuts on iPhone XS production and reallocation towards more 512G models. Meanwhile, Xiaomi (1810.HK: NR), VIVO and OPPO high-end smartphone sell-throughs were weak, and we are now seeing Chinese OEMs cutting high-end smartphone production for Q4…

Overall, we believe consumer spending confidence was weak during the Golden Week holiday. We believe the P2P lending system crack down and weak market performance in the Chinese stock market/real estate market also impacted Chinese consumer spending.

My take: The weakness in Golden Week—one of China’s biggest shopping holidays—had been previously reported. That sales of Apple’s top-of-the-line iPhone are holding up is new.