FORTUNE — Katy Huberty is back from a trip abroad with fresh intelligence from the world’s most important smartphone market: China.
In a series of three “takeaway” notes to clients, she reports:
1. Inventory pile-up: The Chinese government is saying demand for new smartphones fell 9% year-over-year last quarter even as IDC reports shipments of phones into the region rising 37%. Huberty says the Chinese carriers are spending less on marketing and subsidies as they wait for the government to issue 4G licenses.
2. iPhone 6 build-up: Most of the Apple subcontractors she spoke to expect demand for the new iPhone 6 by December will be 20% better than demand was for last year’s big Christmas seller, the iPhone 5S. Huberty was only expecting 12% growth.
3. Big-screen boost: Meanwhile, an April survey for Morgan Stanley by AlphaWise suggests that a larger-screen iPhone — as the iPhone 6 is rumored to be — could buy Apple 11 points of market share in the U.S.
Buyer beware: This Morgan Stanley prediction from last summer didn’t quite pan out:
Katy Huberty: iPhone 5C could push Apple to No. 1 in China
Below: How Huberty’s findings have changed her smartphone model.