Close

Apple (AAPL) iPhone Demand Tracking Ahead of Wall Street Estimates, Morgan Stanley Says

December 19, 2014 9:56 AM EST
Get Alerts AAPL Hot Sheet
Price: $173.79 +0.04%

Rating Summary:
    40 Buy, 24 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 5 | New: 36
Join SI Premium – FREE

Morgan Stanley Apple (NASDAQ: AAPL) analyst Katy Huberty noted today that iPhone demand for the December quarter is tracking ahead of sell-side estimates.

Huberty said their tracker indicates 67 million unit demand for the December quarter, above their estimate of 62 million units and sell-side consensus of about 63 million. "We think buy-side expectations have moved above sell-side models to the mid-60M or above range," she notes. "Demand is also tracking in-line with supply chain build of 65-70M for the quarter, according to our Asia Tech analyst Jasmine Lu."

The analyst said if these numbers hold for the last two weeks of December, it means channel inventory fill for the iPhone will have to occur in the March quarter or beyond.

"Apple has said that they plan to increase iPhone channel inventory from a target range of 4-6 weeks to 5-7 weeks, and that the company was below the 4-6 week range entering the December quarter," she notes. "We estimate a two-week channel inventory replenish could add about 7M units on top of end demand."

Looking at regions, Huberty said China is strong while US is in-line with global demand. "Y/Y growth in the US, Apple's biggest market, in the December quarter is tracking in-line to overall global trends,"she comments. "While in China, which is likely Apple's second largest iPhone market, demand is tracking nearly 3x global Y/Y growth. Apple launched the iPhone on October 17 in China, about a month later than the US. Among other countries we track, Brazil is also tracking significantly above global trends at least partially due to the country launching the new iPhones on November 14. Demand in France and Japan is tracking somewhat below global growth. Japanese demand may be partially impacted by an increase in consumption tax that went into effect in April and regulators preventing carriers from certain promotions, which Apple noted on its June quarter earnings call."

The firm reiterated an Overweight rating and price target of $126 on AAPL.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $112.65 yesterday.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Hot Comments

Related Entities

Morgan Stanley, Earnings, Katy Huberty