Morgan Stanley sent a note to investors on Wednesday that suggests there’s no evidence of an iPhone 8 delay in Apple‘s supply chain.
Several other iPhone supply chain watchers, including KGI Securities Ming-Chi Kuo, Cowen and Company and Drexel Hamilton have issued reports claiming that new components in the iPhone 8, such as OLED panels and 3D sensors, will delay the launch by several weeks past the standard September release.
“Recent reports on low yields for new components that could affect the 10th anniversary iPhone launch have caused investor concern, although Morgan Stanley’s Greater China Technology Research colleagues have not yet seen delays in the supply chain and still expect new iPhone production to start on time for most of the components (including OLED), Morgan Stanley said on Wednesday. “Nevertheless, we remain conservative in our initial expectations for iPhone supply, and forecast unit growth of only 3% in C2H17, well below the implied 20-30% growth based on current build forecasts.”
While it sounds like Morgan Stanley believes Apple may be slow to get new iPhones flying out the door during the second half of this year, it has big expectations for 2018.
Morgan Stanley’s Katy Huberty said the firm is raising its price target to $177 from $161 because of “growing confidence in our FY18 supercycle estimates along with a greater mix of recurring, high-margin services revenue, larger cash balance with potential for repatriation, and the potential for a more elongated upgrade cycle.”
Huberty’s bull-case price target for Apple is $203, up from $190, because Huberty’s team believes estimates for FY iPhone 8 shipments of 237 million units at an average selling price of $683 “essentially flat with the last two quarters, are far too low.”