After notably weak European sales data from Nokia and a major miss from BlackBerry unit volumes, all eyes are now on Apple's EU performance. One of the key surprises of Nokia's report was how the device sales in Europe declined by -9% sequentially from the March quarter. This happened despite the wide launch of the cheap Lumia 520 in EU markets.
Apple is a particularly interesting bellwether, because its annualized revenue growth in Europe was a decent 11% during the March quarter. Somewhat surprisingly, this was the same growth rate as in the previous quarter. Apple remained relatively buoyant in Europe even as revenue growth dropped to 7% in Americas and 8% in greater China. That European growth rate is now going to be under intense scrutiny, as markets widely assume that European demand for consumer electronics cooled down notably during the spring.
Europe is still the second largest market for Apple and remains the linchpin of the global smartphone market. Apple is likely to get its strongest performance out of Asia Pacific - the company has waged an apparently effective campaign in India to gain ground via new installment payment plans. Growth in Americas might also tick up as Verizon and T-Mobile have shown surprisingly strong smartphone numbers for the spring. Overall, iPhone volume has a decent chance of beating the consensus thanks to upgrades from the strong spring of 2011. Europe is likely to be the weakest link - and Apple's performance there may well have a big impact on component names like QCOM and NVDA that are now vulnerable to signs of smartphone and tablet slowdown in EU countries.
