EFTA02527167

From: Richard Kahn < Sent: Thursday, February 15, 2018 1:35 PM To: jeffrey E. Subject: Fwd: Apple, Inc.: iPhone X China Share Gains Accelerating But Competitors Fight Back in Mid-Market Richard Kahn HBRK Associates Inc. 575 =exington Avenue 4th Floor New York, NY 10022 tel fax cell Begin forwarded message: From: =/b>"Morgan Stanley" < Subject: =/b>Apple, Inc.: =Phone X China Share Gains Accelerating But Competitors Fight Back in =id-Market Date: =/b>February 14, 2018 at 7:09:43 PM =ST To: =/la>< > Reply-To: =/b>< > <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> Wealth =anagement <http://www.morganstanley.com/> <http://www.morganstanley.com/img/cs/spacer.gif> Apple, Inc.: iPhone = China Share Gains Accelerating But Competitors Fight Back in =id-Market <http://www.morganstanley.com/img/cs/spacer.gif> EFTA_R1_01667695 EFTA02527167 Katy L. Huberty, CFA =E2 Morgan Stanley February =5, 2018 12:00 AM GMT iPhone China replacement =ycle and share gains surprised positively in 4Q17 but fewer Android =witchers limits unit growth this cycle. In January, iPhone X share =ains accelerated but Chinese vendors re-gained some share against =lder, discounted iPhones in the mid-market. Apple 4Q17 =martphone share surprised positively in China though market demand =isappointed as Android replacement cycles lengthened, taking some air rut of the supercycle. Apple iPhone grew shipments 12% in China last =uarter while Android smartphone shipments declined 17%. This was =pple's second largest sequential share gain in China, and consistent =ith the more than 5 points of active installed base market share gains =ighlighted in Jiguang data, which accelerated post the iPhone 8/8+ and =Phone X product launches. However, Android replacement cycles elongated =1) despite iPhone replacement cycles shrinking in 4417 (2), which =educed the switcher opportunity (31M by our estimates) compared to our =ottom-up model. This suggests 4417 shipment share gains were driven =argely driven by stronger upgrades within Apple's installed base while =ower churn drove the installed base share gains.Overall iPhone active =martphone user share downticked in early January from recent highs but =Phone X share gains accelerating in China... According to data from =iguang, a firm that aggregates smartphone data from its push-messaging =ervices in China, iPhone had 20.6% share of the active smartphone =arket in China in the 4 week period ending January 14th, 2018, down =rom 21.8% in the prior 4 week period ending December 31, 2017 (3). This =epresents the second largest period over period share loss since we =egan tracking this data in January 2017 (largest was in August 2017), =ith market share largely picked up by the big 4 Chinese smartphone =endors (4). Importantly for Apple, and despite the overall share loss =s. peers, adoption of the iPhone X continued to accelerate in the =atest period, account This alert is sent from: Andrew Atlas, You received this because you requested =hat you receive content and reports from: APPLE =NC. Please contact your FA if you want to unsubscribe from the =lerts. <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> Disclosures: Please see =he full report for risks, disclosures and other important =nformation. Important disclosures regarding the =elationship between the companies that are referenced in Morgan Stanley =esearch and Morgan Stanley Wealth Management research are available on =he Morgan Stanley Wealth Management disclosure website at https://www.morganstanley.com/online/researchdisclosures. 2 EFTA_R1_01667696 EFTA02527168 Morgan Stanley Wealth Management Not Acting as Municipal =dvisor Morgan Stanley Wealth Management is not acting as a municipal =dvisor to any municipal entity or obligated person within the meaning =f Section 158 of the Securities Exchange Act (the "Municipal Advisor =ule") and the opinions or views contained herein are not intended to =e, and do not constitute, advice within the meaning of the Municipal =dvisor Rule. Copyright The =opyright in materials provided by Morgan Stanley is owned by Morgan =tanley & Co. LLC. Morgan Stanley Wealth Management is the trade =ame of Morgan Stanley Smith Barney LLC, a registered broker-dealer in =he United States. © 2018 Morgan Stanley Smith Barney LLC. Member =lPC. <http://www.morganstanley.com/imecs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> <http://www.morganstanley.com/img/cs/spacer.gif> 3 EFTA_R1_01667697 EFTA02527169