Apple iPhone production may surprise to upside, Morgan Stanley says

seekingalpha2021-12-22

Apple(NASDAQ:AAPL)iPhone production could surprise to the upside this quarter, Morgan Stanley analyst Katy Huberty wrote in a note to clients, as lead times are declining to "more normalized levels."

Citing a "handful" of data points that the firm has seen over the past month, Huberty notes that the supply of semi-related components are improving and iPhone builds in the December quarter are "stable" at 82 million units. In addition, Apple (AAPL) is seeing improved supply for power management integrated circuits and world-facing camera modules, all of which suggests that iPhone builds in December are likely to be flat or slightly down month-over-month, compared to a significant month-over-month decline in previous years.

Additionally, Huberty notes that lead times for Apple's (AAPL) high-end iPhone 13 models, the Pro and Pro Max are at 2 days as of December 21, down from 20 days a month ago.

'[W]hile some investors may view this lead time contraction as a sign of slowing demand, we'd note that major end markets like China are posting iPhone shipment growth of +46% [year-over-year] [quarter-to-date] through the end of November," Huberty wrote.

"While we don't have enough data to definitively say that iPhone will exit the December quarter in supply/demand balance, we do believe that iPhone production is surprising to the upside, which supports our 7% above consensus December quarter iPhone revenue forecast."

Apple (AAPL) shares have gained more than 33% year-to-date.

Huberty added that she is keeping an eye on Apple (AAPL) retail stores that are closing as a result of increasing COVID-19 cases in North America.

On Tuesday, Apple (AAPL) was upgraded at Moody's, as the credit-ratings agency cited the tech giant's "exceptional liquidity" and earnings power.

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Comments

  • Bryonie
    2021-12-26
    Bryonie
    Good company 
  • Edwintan2
    2021-12-23
    Edwintan2
    How it may surprise?
  • SSVC
    2021-12-23
    SSVC
    Ok Appreciate your comments and response Thanks 
  • Williamw
    2021-12-23
    Williamw
    Ok
  • Gerberas
    2021-12-23
    Gerberas
    Ok
  • MOON88
    2021-12-23
    MOON88
    Buy and hold apple
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