EFTA02644367

From: Richard Kahn <[email protected]> Sent: Tuesday, June 5, 2018 12:31 PM To: Jeffrey Epstein Subject: Fwd: Apple, Inc.: WWDC 2018: All About Software Richard Kahn HBRK Associates =nc. 575 Lexington =venue, 4th Floor New York, NY =0022 Begin forwarded message: From: =/b>"Morgan Stanley' < Subject: =/b>Apple, Inc.: WW0C =018: All About Software Date: =/b>June 4, 2018 at 9:10:30 PM =DT 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/img/cs/spacer.gif> Apple, Inc.: WWDC =018: All About Software <http://www.morganstanley.com/> EFTA_R1_01880097 EFTA02644367 Katy L Huberty, CFA =E2 Morgan Stanley June 5, =018 1:04 AM GMT Apple's WWDC Keynote focused =n enhancements to iOS, watchOS, NOS and macOS that strengthen the =alue of the Apple ecosystem. Similar to last year, highlights were AR =unctionality and AI/ML capabilities. Cumulative developer payments =mply App Store outperforming our ests again this quarter. The App Store tracking ahead of our estimates. Apple CEO Tim =ook opened the 2018 WWDC Keynote by announcing that the Apple developer =ommunity is now 20M strong, a 25% increase from a year ago. He also =nnounced 500M visits to the App Store weekly. Most importantly, he =ighlighted that cumulative payments to developers will top $1008 this =eek, implying YID payments of $13.58, and YTD App Store revenue of =5.8B (assuming a 30/70 split between Apple and Developers). Our math =mplies Apple is tracking to App Store revenue over $3.68 (+35% y/y) in =he June quarter, compared to our $3.58 forecast(+30% Y/Y) (1). This is =n acceleration from 29% Y/Y growth in the March quarter. As we =ighlighted in our recent Services note, App Store contributes nearly =0% of Services revenue with diversifying growth drivers that suggest =he recent strong growth rates are sustainable.Updates to Augmented =eality and Al capabilities the most important software announcements. =imilar to last year, we view the iOS 12 updates to both AR =unctionality and Al/ML integration as the key announcements of the day. =or AR, Apple released ARKit 2.0, the augmented reality toolkit for app =evelopers, which now offers improved face tracking, more realistic =mage rendering, 3D object detection and, most notably, the ability to =reate a shared multi-player/device AR experience. Apple also introduced =ongue detection and the ability to customize your own lookalike =nimoji, called MeMoji, which we see as a direct shot at Snapchat's =opular Bitmoji tool. On the AI side, Apple's newest feature is called =hortcuts, which allows users to create action-based commands to =utomate tasks based on your schedule, location, This alert is sent from: Andrew Atlas, [email protected] 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_01880098 EFTA02644368 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_01880099 EFTA02644369