EFTA02536770

From: Richard Kahn < Sent: Wednesday, January 17, 2018 12:07 PM To: Jeffrey Epstein Subject: Fwd: Apple, Inc.: Broader iPhone X Upgrades in China Support Supercycle View Richard Kahn HBRK Associates =nc. 575 Lexington =venue, 4th Floor New York, NY =0022 tel fax cell Begin forwarded message: From: =/b>"Morgan Stanley' Subject: =/b>Apple, Inc.: =roader iPhone X Upgrades in China Support Supercycle View Date: =/b>January 17, 2018 at 12:57:46 AM =ST To: =/b> 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.: Broader =Phone X Upgrades in China Support Supercycle =iew <http://www.morganstanley.com/img/cs/spacer.gif> EFTA_R1_01682967 EFTA02536770 Katy L. Huberty, CFA =E2 Morgan Stanley January =7, 2018 5:01 AM GMT iPhone X adoption outpacing =Phone 8/8+ as Apple retention & switching rates dwarf Chinese =ompetitors. Plus, an increasing mix of upgrades from the much larger =ase of 3+ year old iPhones points to a strong upgrade cycle in China. =aken together, we remain confident in our bullish China thesis. iPhone X adoption continues to outpace the iPhone 8 and 8 =lus in China. This is our 3rd note in a series of reports written in =ollaboration with our AlphaWise team (past notes can be found here and =ere) that evaluate share gains/losses in the active smartphone market =n China, with a focus on market share trends and the impact of Apple's =ecent iPhone 8, 8 Plus and X launch. Data through the 4 week period =nding December 17th shows that Apple continues to gain share of the =ctive base of smartphones in China (counter to the consensus view that =pple is losing share), capturing 21.3% market share, 250bps higher than =heir closest competitor (1). Within this data, we see that iPhone X =doption continues to ramp faster than the iPhone 8 and 8 Plus at the =omparable period after launch, with iPhone X capturing 1.64% of the =pple active user base vs. 1.32% for iPhone 8 Plus and 0.65% for iPhone = (2), despite iPhone X only being available for 72 days vs. 97 days for =he 8/8 Plus. Adjusted for total selling days, iPhone X gained 3.7bps of =hare in the Apple active user base per day through December 19th vs. =.3bps for the iPhone 8 Plus and 1.1bps for the iPhone 8 at the =omparable time period (3). Given these strong and accelerating data =oints for the iPhone, and iPhone X in particular, we remain confident =n our thesis that Apple is turning the corner in China and growth will =ccelerate in the quarters to come.Retention Rates and Switching Rates =ontinue to dwarf competition. The 4 week period ending December 17th =arked the 2nd 4-week period with a full 28 days of iPhone X data, and =s 4 highlights, Apple's retention rate continues to climb faster than =ompetitors. In fact, 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. 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 15B of the Securities 2 EFTA_R1_01682968 EFTA02536771 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 =IPC. <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> <http://www.morganstanley.com/img/cs/spacer.gif> 3 EFTA_R1_01682969 EFTA02536772