EFTA02630354

From: Richard Kahn < Sent: Wednesday, March 13, 2019 9:50 PM To: Jeffrey Epstein Subject: Fwd: Apple, Inc.: Early Signs of iPhone Stabilizing in China Richard Kahn HBRK Associates Inc. 575 =exington Avenue 4th Floor New York, NY 10022 Begin forwarded message: From: =/b>"Morgan Stanley" <[email protected]> Subject: =/b>Apple, Inc.: =arty Signs of iPhone Stabilizing in China Date: =/b>March 13, 2019 at 5:35:41 PM =DT To: =/b>< Reply-To: =/b><[email protected]> <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/img/cs/spacer.gif> Apple, Inc.: Early =igns of iPhone Stabilizing in China <http://www.morganstanley.com/> EFTA_R1_01849675 EFTA02630354 Katy L. Huberty, CFA— Morgan Stanley March 13, 2019 9:30 PM GMT After losing share in 4Q18, iPhone =nstalled base data shows market share recovering after price cuts in =arly 2019. Combined with stabilizing iPhone supply chain data points, =e now see an upward bias to our iPhone estimates in the March quarter. =emain OW with $197 PT. With two weeks to go, we're =ositively biased on Apple's March quarter in light of stabilizing =Phone data points. We'd highlight four positive data points. First and =ost important, despite a Chinese smartphone market that remains weak =Feb smartphone shipments hit a 6-year low), Apple gained share of the =hinese smartphone installed base Y/Y in January and February after =osing share in the December 2018 quarter, which we detail below (1). =his is on the back of Apple cutting iPhone XR prices in January and =etailers noting improved sales. Price cuts on XS and XS Max could =mprove demand further in the month of March where we don't yet have =ata. Second, February was the first month in half a year that our Asia =eam didn't revise iPhone builds lower (February 2019 Monthly Databook), =mplying the most significant supply chain cuts are likely behind us. =hird, this is the first time that our March (and June) quarter iPhone =orecast is actually below our Asia Hardware team's build forecast (2), =uggesting near term estimates may have overshot on the downside. While =pple acknowledged that January month sales improved from December, =arch quarter guidance didn't assume this improvement carried into =ebruary and March, while installed base trends suggest that may prove =onservative. Fourth, based on our 180M FY19 iPhone shipment forecast, =eplacement cycles have converged with PCs after which we would expect =tabilization. Our recent investor conversations point to =eutral/negative positioning, providing a constructive set-up into the =rint which we expect in early May.Smartphone installed base and =hipment data confirms Apple lost traction in China in 4Q18. While Apple =aintained 9% sh This alert is sent from: Andrew Atlas, You received this because =ou requested that 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_01849676 EFTA02630355 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. © =019 Morgan Stanley Smith Barney LLC. Member SIPC. <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_01849677 EFTA02630356