EFTA00649638.pdf

From: Paul Barrett To: Jeffrey Epstein <[email protected]> Subject: Fwd: AAPL US: Apple Inc. - Early preorders for iPhone X create extended lead times within hours - BUY - United States Date: Fri, 27 Oct 2017 13:30:44 +0000 Inline-Images: flag11805253.jpg; logo11805253.jpg; rpt11805253.jpg; emaill1805253.jpg; bamllogo11805253jpg Paul Barrett Alpha Group Capital LLC 142 W 57th Street, I l th Floor, New York, NY 10019 (o) (c) Begin forwarded message: From: "Ens, Amanda" < Date: October 27, 2017 at 8:20:03 AM EDT To: Paul Barrett Subject: FW: AAPL US: Apple Inc. - Early preorders for iPhone X create extended lead fillies within hours - BUY - United States From: BofAML-Wamsi Mohan Date: Friday, Oct 27, 2017, 8:10 AM To: Ens, Amanda <I Subject: AAPL US: Apple Inc. - Early preorders for iPhone X create extended lead times within hours - BUY - United States Global Research BofAML Flagmark Apple Inc. Early preorders for iPhone X create extended lead times within hours Reiterate Rating: BUY PO: 180.00 USD I Price: 157.41 USD Equity 1 27 October 2017 Key takeaways ;01-..,nr, V nranntro ot.rtnrl nf 99A KA DT /2ARA CT% Ihic mnrninn (L .r rknnLec indinnfn of rt,nn inninl EFTA00649638 ". II I ILOI IV t% IJI WVIUVI O OLCII wv CIL I L/nIVI I I ksrtivi L, / 11 Ito I I iv. 1 Iti NJUI IVVIVO a ILIIVOILW Oil VI I9 II demand for the new phone • Within an hour of preorders, the expected ship date had extended from Nov 3rd out to 4-5 weeks, and then to 5-6 weeks (Fig 1) • Ship dates this cycle have extended our further and faster than the iPhone 6/6+ launch (see Figure 2) FULL REPORT Ship time extends out within a few hours of pre-orders iPhone X preorders started at 12AM PT (3AM ET) this morning and within a few hours the estimated ship date in many countries stretched out to 5-6 weeks. Figure 1 shows a chart of the trend in ship dates which indicates to us 1) lack of availability (supply constraint), as well as 2) reasonably strong demand for the iPhone X. This compares to 4-6 weeks of elongated lead times (Figure 2) during the launch of the iPhone 6/6+, where the availability was limited and it was a major form factor change. We continue to see strong demand from the new iPhone driving strength in the Dec and Mar quarters. We reiterate our Buy on Apple on strength of the iPhone X cycle, large cash balance which affords optionality to enter new markets, and continued strong capital return program. iPhone X availability at 5-6 weeks As Figure 1 shows, within an hour of starting of pre-orders the iPhone X availability had stretched from the initial expected ship date of Nov 3rd, out to 4-5 weeks. Then, an hour later, that availability had stretched another week to 5-6 weeks. The demand for the 256GB Space Gray model seemed to stretch out first, which is positive for ASP uplift. Availability in China extended out to 5-6 weeks earlier within the first hour. Given China is the largest market for iPhones, strong demand for iPhone X there bodes well for Apple particularly as this is the first major form factor change post the iPhone 6. Store availability remains mixed: large premiums on Ebay Apple usually allocates some supply for its stores and in the US Sprint had some iPhones (64GB) available for earlier pickup in store for longer than other carriers. Some of the early buyers of the iPhone X have already turned to EBAY to sell the phones for a significant premium ($1700-2500). We plan to monitor the ongoing pre-order cadence through the elongation of lead times. Wamsi Mohan !Send email Research Analyst MLPF&S This report is intended for ;11BofAML logo EFTA00649639  Click here to access the Research Library Read tho research report. available through tho link above. for complete information including important disclosures and analyst certification(s). The research report and the link to such report are for the use of Bank of America Merrill Lynch customers only and all copying. redistribution. retransmission, publication. and any other dissemination or use of the contents thereof are prohibited. There may be more recent information available. Please visit one of the electronic venues that carry BofA Merrill Lynch Global Research reports or contact your Bank of America Merrill Lynch representative for further information. "Bank of America Merrill Lynch" is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Click here to stop or modify the delivery of Research via Emails. Publication: 61977350-11805253.pdf Recipient: http://rsch.baml.com/r?g=KZChxAeCgkGhB9AP9U8x4O8e=amanda.ens%.40baml.com&h=m5nmVw This message, and any attachments, is for the intended recipient(s) only, may contain information that is privileged, confidential and/or proprietary and subject to important terms and conditions available at http://www.bankofamerica.cornkmaildisclaimer. If you are not the intended recipient, please delete this message. EFTA00649640