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Morgan Stanley: iPhone X Is Winning Market Share In China

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Morgan Stanley: iPhone X Is Winning Market Share In China
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Apple Inc. (NASDAQ: AAPL)'s revenue from China is closely watched by investors and Wall Street analysts, and the latest data points from the world's biggest smartphone market reinforces a bullish stance on the stock, according to Morgan Stanley.

The Analyst

Morgan Stanley's Katy Huberty maintains an Overweight rating on Apple's stock with an unchanged $203 price target.

The Thesis

iPhone shipments in China rose 12 percent in the most recent quarter, while Android shipments fell 17 percent over the same time period, Huberty said in a research report. This marks Apple's second-largest sequential share gain China and is consistent with prior data readouts. 

For the four-week period ending Jan. 14, Apple's iPhone accounted for a 20.6-percent share of the total active smartphone market, Huberty said. This does mark a decrease from a 21.8-percent market share in the prior four-week period, but encouragingly, adoption of the high-end iPhone X accelerated. Adoption of the iPhone X accounted for over 3 percent of the iPhone active installed base in China, up 73 basis points from the prior period.

Apple's pricing for its iPhone 6 starts at $350; pricing the iPhone 7 at $130 below the iPhone 8 may have created demand for older iPhone models, the analyst said. But local Chinese brands appear to be responding to their market share losses and the competitive environment is likely to intensify in the mid-market category, according to Morgan Stanley.

The iPhone X's momentum in China is still expected to drive active smartphone market share gains for Apple, despite the current iPhone cycle not being the "supercycle" that many expected, Huberty said. 

Price Action

Shares of Apple were trading higher by 1.2 percent early Thursday morning.

Related Links:

Goldman On Apple: Waiting On The Sidelines

Analyst: Apple's Stock 'Represents A Healthy Buying Opportunity' Right Now

Photo courtesy of Apple. 

Latest Ratings for AAPL

DateFirmActionFromTo
Jun 2018ArgusMaintainsBuyBuy
May 2018Maxim GroupDowngradesBuyHold
May 2018Morgan StanleyMaintainsOverweightOverweight

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: Apple China iPhone China iPhone X Katy HubertyAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

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