iPhone Comeback? Morgan Stanley Talks Apple's Chinese Growth

Apple Inc. AAPL saw gains in iPhone use in March for a third straight month in China, marking a turnaround from late last year, when the brand was losing share in the country, according to Morgan Stanley.

The Analyst

Katy Huberty has an Overweight rating on Apple with a $220 price target.

The Thesis

Year-over-year growth in the “installed base,” or the number of iPhones in use in China, in March was the best it has been in 15 months, Huberty said in a Friday note, citing data from Jiguang, a firm that aggregates smartphone data in China.

The year-over-year increase in March was a noted change from last year, when Apple reported at the end of its December quarter that the iPhone lost share in China for three straight months, the analyst said.

The new data showed Apple was the only one of the top smartphone vendors in China to see an installed base share gain in March versus February.

As of the end of the March quarter, iPhone’s share of the installed base in China was just under 21 percent, and it closed the gap with Huawei for top market share by 190 basis points, Huberty said.

The suggestion of a possible rebound for Apple in China would be welcome news, as others have expressed fears in recent months that the ongoing trade war between the U.S. and China could continue to hamper sales, according to Morgan Stanley.