Tariff risks recede + pricing potential, Morgan Stanley bullish on Apple Inc. (AAPL.US): iPhone sales forecast raised to 54 million units.

Morgan Stanley has raised its forecast for iPhone sales in the September quarter of Apple Inc. (AAPL.US), increasing the previous estimate of 50 million units (a 7% decrease from the previous year) by 8% to 54 million units (a flat comparison from the previous year). The analysis team led by Eric Woodland pointed out that this adjustment is due to multiple positive factors: pent-up demand from the longer replacement cycle of iPhones, upcoming new model designs, and improvements in structural gross profit margins, all of which were key factors that supported their optimistic forecasts last July and are still in effect. Analysts emphasized that previous concerns over peak tariff risks (such as Section 232) have largely receded, and regulatory impacts on short-term performance are weaker than market expectations (although they remain long-term risks). In addition, Apple Inc.'s pricing strategy is underestimated - its service prices haven't been adjusted for two years, and this leverage could unleash growth potential in the future. The current trading level of Apple Inc. relative to the S&P 500 index is basically the same as the five-year average level, providing support for its valuation. It is worth noting that this production adjustment mainly targets the iPhone 16 and Pro Max models, with an additional capacity of 2 million units each. However, Morgan Stanley stated that their internal forecast of 55 million unit sales already partially covers this increase, exceeding the revised forecast of 54 million units by about 800,000 units. Looking ahead to the second half of 2025, analysts expect production of the iPhone 17 series to remain in the range of 80 to 85 million units, a decrease of 5% to 1% compared to the previous year (which was 84 million units in 2024). It is also pointed out that the seasonal fluctuations in iPhone production in the December quarter are usually greater than those in the September quarter, with the quarterly growth rate ranging from 35% to 71% over the past five years (excluding the special period of the COVID-19 pandemic in 2020-2021). The team also observed that the current market estimates for the iPhone are showing an upward trend, and historically, Apple Inc.'s stock price tends to expand during estimate revisions. Combined with channel inventory levels being below normal, there is greater room for inventory replenishment in the September quarter, which collectively supports their optimistic outlook on iPhone sales prospects.