EFTA00717017.pdf

From: Richard Kahn To: Jeffrey Epstein <[email protected]> Subject: Fwd: Apple, Inc.: Initial iPhone 7 Data Points Better Than Expected Date: Wed, 14 Sep 2016 11:22:05 +0000 Sent from my iPhone Begin forwarded message: From: "Morgan Stanley" Date: September 14, 2016<111.1 111 To: <1 Subject: Apple, Inc.: Initial iPhone 7 Data Points Better Than Expected Reply-To: <mswmir-cle-feedback((tmorganstanley.com> WEALTH MANAGEMENT a Pin Subscription Notification: September 14 Apple, Inc.: Initial iPhone 7 Data Points Better Than Expected Katy L. Huberty, CFA — Morgan Stanley September 14, 2016 4:01 AM GMT Many saw iPhone 7 as another iteration of 6s before a major redesign next year. However, positive pre-order and other data points suggest iPhone 7 may exceed low expectations. We continue to like AAPL, especially as only 25% of existing iPhone users need to upgrade to beat consensus/MS estimates. T-Mobile and Sprint's iPhone 7 and 7 Plus pre-orders are both up nearly 4x compared to last year's launch. The first day of pre-orders also set a single day sales record across all smartphones at T-Mobile. While T-Mobile and Sprint are likely gaining share as they have only one-quarter of the US iPhone installed base, we note there are similar wait times on Apple.com for most models at the four major US carriers. Apple's online store in China also showed at least a week's wait for most models. The two countries account for about half of iPhone sales. New US carrier promotions appear more aggressive vs. EFTA00717017 year ago and reminiscent of old two-year subsidy programs. Verizon, AT&T, Sprint and T-Mobile all recently announced new promotions for the iPhone. Customers can get a free 32GB iPhone 7 ($650 value) by trading in an eligible device in good working condition and signing up for a 24-month service agreement. These promotions are more aggressive than last year's deals for the iPhone 6s, which largely only subsidized part of the handset value with an eligible trade in at certain carriers. We believe iPhone users may be more willing to upgrade to the iPhone 7 due to the more aggressive promotions, despite the 2-year lock in.Other data points since Apple's iPhone keynote have been generally positive. Most reviews today have a positive tone, noting the better cameras, longer battery life, water resistance, and some even said the lack of a 3.5mm headphone jack is not a major issue. Our Asia tech team, led by Jasmine Lu, maintained total iPhone build estimates of 44M in Sep Q and 72M in Dec Q, unchanged from last month. iPhone 7 and 7 Plus builds of 83M in C2H16 are also unchanged an Click here to see the full report. This alert is sent from: Andrew Atlas, You received this because you asked to be alerted to: APPLE INC. Please contact your FA if you want to unsubscribe from the alerts. Disclosures: Please see the full report for risks, disclosures and other important information. Important disclosures regarding the relationship between the companies that are referenced in Morgan Stanley research and Morgan Stanley Wealth Management research are available on the Morgan Stanley Wealth Management disclosure website at https://www.morganstanley.com/online/researchdisclosures. Morgan Stanley Wealth Management Not Acting as Municipal Advisor Morgan Stanley Wealth Management is not acting as a municipal advisor to any municipal entity or obligated person within the meaning of Section 15B of the Securities Exchange Act (the "Municipal Advisor Rule") and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of the Municipal Advisor Rule. Copyright The copyright in materials provided by Morgan Stanley is owned by Morgan Stanley & Co. LLC. Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker-dealer in the United States. O 2016 Morgan Stanley Smith Barney LLC. Member SIPC. EFTA00717018