Tariff risk recedes + pricing potential, Morgan Stanley is optimistic about Apple: iPhone sales forecast raised to 54 million units
Morgan Stanley raised its forecast for Apple's iPhone September sales from 50 million units to 54 million units, mainly benefiting from an extended replacement cycle, new model designs, and improved gross margins. Analysts pointed out that tariff risks have basically dissipated, and Apple's pricing strategy is underestimated, with growth potential in the future. It is expected that the production of the iPhone 17 series in the second half of 2025 will be between 80 million and 85 million units. The market's upward revision of iPhone estimates has historically been accompanied by valuation expansion during this period
According to Zhitong Finance APP, Morgan Stanley has raised its forecast for Apple's (AAPL.US) iPhone sales in the September quarter from the originally expected 50 million units (a year-on-year decline of 7%) to 54 million units (year-on-year flat), an increase of 8%. The analysis team led by Eric Woodring pointed out that this adjustment is due to multiple positive factors: pent-up demand from an extended iPhone replacement cycle, the upcoming new model design, and structural gross margin improvements. These key factors that supported their optimistic expectations last July continue to play a role.
Analysts emphasized that previous concerns about peak tariff risks (such as Section 232) have largely dissipated, and the regulatory impact on short-term performance is weaker than market expectations (although it remains a long-term risk). Additionally, Apple's pricing strategy is underestimated—its service prices have not been adjusted for two years, and there is potential for growth through this leverage in the future. Currently, Apple's stock price relative to the S&P 500 index is consistent with the average level over the past five years, indicating supportive valuations.
It is noteworthy 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 its internal forecast of 55 million units has partially covered this increment, exceeding the revised forecast of 54 million units by approximately 800,000 units.
Looking ahead to the second half of 2025, analysts expect the production of the iPhone 17 series to remain in the range of 80 million to 85 million units, a year-on-year decline of 5% to 1% (compared to 84 million units in the same period of 2024). They also noted that the seasonal fluctuations in iPhone production during the December quarter are typically greater than those in the September quarter, with the past five years (excluding the special pandemic period of 2020-2021) showing a quarter-on-quarter increase ranging from 35% to 71%.
The team also observed that the current market estimates for the iPhone are on an upward trend, and historically, Apple's stock price often experiences valuation expansion during estimate revisions. Combined with channel inventories being below normal levels, there is greater room for replenishment in the September quarter, and these factors collectively support their optimistic outlook for iPhone sales
