Pacific Crest Analysts Went To China, Offered Updates On Apple & Samsung

In a report published Monday, Pacific Crest analyst John Vinh commented that his quarterly handset checks were mixed with weak overall demand in China.

According to Vinh, supply chain partners indicate Chinese demand for smartphones was weaker than expected on delays of FDD-LTE licenses and excess inventories. However, the analyst saw signs of stabilization after Chinese New Year and the second quarter should show "modest" growth of 5 to 10 percent quarter-over-quarter, but below normal season expectations of 20 percent growth.

Meanwhile, Samsung Electronics Co Ltd (OTC: SSNLF) has increased its outlook for the GS6 to four million units in the first quarter from prior estimates of two million to three million units. In the second quarter, the company expects to ship 20 million to 22 million units, above prior estimates of 18 million to 20 million.

Accordingly, the analyst is now expecting demand to drive annual shipments of the GS6 in 2015 to over 45 million units, marking a 22 percent year-over-year increase versus the GS5 in 2014.

Finally, Vinh stated that Apple Inc. (NASDAQ: AAPL) has seen a healthy demand for its iPhone 6 and 6 Plus in the quarter, as supply chain partners indicated demand continued to track better than seasonal.

Vinh added that component orders in the first quarter are tracking better than seasonal at -15 percent to -20 percent sequentially. For the second quarter, given lean channel inventories, demand for component orders should be flat to down 5 percent sequentially.