Published on October 18, 2023, 8:08 pm
Image source: Fox News
Morgan Stanley has predicted that supply issues with the iPhone 15 Pro and iPhone 15 Pro Max will lead to lower sales in the next quarter. As a result, the investment bank has reduced its Apple price by $5. While Morgan Stanley expects Apple’s next earnings call to meet predictions for the current quarter, it anticipates a weaker performance in the following quarter due to supply chain constraints.
The bank highlights solid margins and services as positive aspects of the current quarter but acknowledges that these factors are unlikely to sway market sentiment. Despite slightly raising its September quarter estimates, Morgan Stanley is decreasing its December quarter estimates by 5-9% due to delays in iPhone 15 production. The analysts expect two million units of the iPhone 15 Pro Max to be pushed from December to March of next year.
Labor shortages in the Kunshan/Shanghai area are slowing down assembly of the iPhone 15 Pro, resulting in a one-million-unit delay in shipment. However, Morgan Stanley believes that sales of the Pro models are outperforming other iPhone models and expects Apple to shift production capacity accordingly early next year.
While there is little change in Mac, iPad, and Wearables forecasts for both September and December quarters, Morgan Stanley does predict growth for Mac and Wearables due to easier year-over-year comparisons. The bank also forecasts a growth slowdown but not a contraction for Apple’s Services segment.
Despite an expected decline in Services revenues for the December quarter compared to last year’s strong performance, Morgan Stanley remains positive about future growth potential. It suggests that Services can continue to grow at a low-to-mid teens percentage into fiscal year 2024.
Overall, Morgan Stanley sees little change in Apple’s Mac, iPad, and Wearables segments but anticipates lower performance in the December quarter due to supply chain challenges. Although challenges persist, particularly regarding labor shortages and component availability, analysts believe that Apple’s Pro models are driving strong sales and that the company’s Services business will continue to grow in the coming years.
Original article posted by Fox News