Morgan Stanley: This is the smartphone Chinese buyers have been waiting for.
From a note to clients by Katy Huberty that landed in my inbox Thursday:
We now have data through November 19 that bolsters our bullish China thesis. This additional data show that iPhone X adoption in China is on a faster pace than the iPhone 8 or 8 Plus. As Exhibit 2 depicts, iPhone X represented 0.36% of the iPhone installed base in China through November 19, higher than the initial adoption of the iPhone 8 or 8 Plus. Importantly, the data through November 19 only contains 16 days of iPhone X availability, whereas the comparable period for the iPhone 8 and 8 Plus includes a full 28 days. As a result, we expect further acceleration of iPhone X relative to iPhone 8/8 Plus in the next data release.
Click to enlarge.
More from Huberty:
The net switching rate to Apple, or percentage of non-iPhone smartphone owners that switched to an iPhone minus the percentage of iPhone owners that switched away to a different smartphone brand, accelerated 130bps [1.3%] in the four-week period ending November 19, to 9.2% (Exhibit 7).
Google Trends data corroborate bullish outlook for iPhone X in China. As you can see in Exhibit 10, weighted Google search trends by region point to higher searches for iPhone in China than any other region and an accelerating rate of searches in C4Q17, greater than the acceleration in 4Q14 after the iPhone 6 launch. While search data reflect interest, not necessarily purchases, the combination of strong searches and share gains within the active user base is bullish, in our view. We continue to believe that China will be the primary driver of iPhone growth in FY18 and model 74M iPhone shipments in FY18, up 80% Y/Y.
Reiterates Overweight rating and $200 price target. Apple remains a Morgan Stanley “top pick.”
My take: Huberty is the anti-Kvaal. Apple was up a buck and a quarter in midday trading Thursday.