Demand for Apple’s (NASDAQ:AAPL) iPhone 17 is likely “up,” amid rising lead times, Morgan Stanley said.
Shares rose fractionally in midday trading on Wednesday.
“Our iPhone 17 lead time analysis suggests that early demand for the iPhone 17 models is stronger than at the onset of the iPhone 16 cycle last year, a positive early indication that iPhone replacement cycles could be stabilizing and upgrade rates could be improving [year-over-year],” analyst Erik Woodring wrote in a note to clients.
Lead times for the iPhone 17 (excluding the iPhone Air) are in-line to higher year-over-year in nearly every region. Pre-orders in China were also stronger year-over-year, Woodring added. Woodring has an Overweight rating and $240 price target on Apple.
Breaking it down by model, lead times for the iPhone 17 Pro Max are 22.5 days in the US, and 24 days, on average, internationally; 14.2 days in the U.S. and 18.1 days internationally for Phone 17 Pro; 6.7 days in the U.S. and 7.9 days internationally for the iPhone Air; and 15.5 days in the U.S. and 19 days internationally for the iPhone 17.
“It’s still early in the cycle, and historically lead times don’t have predictive power over next 12 month iPhone shipment growth, but knowing iPhone supply is better Y/Y and early demand indicators are in-line to stronger Y/Y is informative enough to be positively biased on the iPhone 17 and Apple shares despite seasonality historically working against Apple’s favor,” Woodring added.