Morgan Stanley: iPhone lead times set new records

Apple is setting itself up for a strong December quarter says analyst Katy Huberty.

From a note to clients that landed on my late desktop Tuesday:

As of Tuesday, January 5th, iPhone 12 Pro lead times in the US remain elongated at 3 weeks vs. just 1 day for all prior iPhone models launched in the last 4 years at 10.5 weeks post launch.

For the iPhone 12 Pro Max, lead times are 4.4 days as of January 5th, 2nd longest among all iPhone models launched in the last 4 years at 8.5 weeks after launch (second only to the iPhone 12 Pro; Exhibit 18).

Finally, lead times for the iPhone 12 and iPhone 12 mini remain stable at 1-3 days, in line with most past iPhone model launches. However, as we highlighted prior to the holidays, we believe these lower priced 5G models are performing better in international markets, specifically China (Exhibit 21), where the average smartphone price is 30%+ lower than in the US and where aggressive carrier subsidies and trade-in adoption is lower than in the US.

This data reinforces our bullish iPhone outlook (MSe is 8% above the consensus iPhone revenue forecast in the December quarter and 6% above in FY21) and helps refute recent investor concerns of weaker C1Q21 A14 chip orders that were rumored prior to the holidays (and addressed by Morgan Stanley’s TSMC analyst, Charlie Chan).

Maintains Overweight rating and $144 price target. 

Cue Exhibit 18 (click to enlarge):

apple iphone records morgan stanley

My take: This is just the tip of a Morgan Stanley data dump that includes 100 numbered exhibits.

7 Comments

  1. Gregg Thurman said:
    There is a logjam of WS price targets in the vicinity of $150. From past experience studying the length of forecasts, I interpret them to be for the April time frame, most likely early to mid April.

    2
    January 5, 2021
    • Jerry Doyle said:
      @Gregg Thurman: Y-E-S- yes, yes, yes! Will everyone please indulge me while I “toot-my-horn!” I’ve been singing the $150 target price by the Q2 2021 earnings call since after the 4:1 stock split. So please indulge me while I slap my leg, click my heels and me and Mr. Bojangles dance across Jackson Square over to the Café du Monde. Dance, Dance & Dance. 🙂

      1
      January 6, 2021
    • David Drinkwater said:
      Price targets really are supposed to be for 12 months out, and since 12 months out is *really* far out, they are typically ungodly conservative. Morgan Stanley puts together some amazingly detailed reports, so this report is not data free, but it does not yet have the most crucial data points to come: Apple 2021FQ1/FQ2 Reports, which would potentially move the needle for “12 months” from *today*.

      All this said, I could easily see Apple 2021FQ1/FQ2 Reports pushing AAPL to $150 shortly after both reports have been digested by the market.

      I think $150 twelve months from now is a tad bit conservative, given the above, but it would still represent about a 15% gain on top of a boffo gain in 2020. Nothing to complain about.

      1
      January 6, 2021
    • Jonny T said:
      600 in old money… how did we do?

      1
      January 6, 2021
  2. Romeo A Esparrago Jr said:
    “ For the iPhone 12 Pro Max, lead times are 4.4 days as of January 5th “

    Sounds right. For my iP12 Pro Max I ordered on New Year’s Day, Apple stated it would ship 3-5 business days and be in my hands between the 8th & 12th of this month.

    I’d be receiving this month also if I’d ordered back In late Nov./early December.

    1
    January 5, 2021
  3. Robert Stack said:
    While I don’t consider myself a grammar cop, it’s a bit disappointing to see Katy/Morgan Stanley state: “This data reinforces our bullish iPhone outlook…”. The word data is plural (datum = singular), the verb afterward therefore should be singular, and the sentence is more correctly written as “These data reinforce our bullish iPhone outlook…”. Yes a minor quibble (from a science geek), and yes it’s certainly an easy thing to overlook from an analyst of Katy’s quality and caliber. Who knows – maybe she reads Apple 3.0?

    1
    January 6, 2021
    • Jonny T said:
      ‘These data’ sounds ridiculous. Shakespeare would have taught us to say ‘this data’..

      0
      January 6, 2021

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