Positive trends in multiple sectors! Morgan Stanley IT hardware industry data tracking: Apple's App Store growth exceeds expectations, cloud capital expenditures rebound strongly

According to the latest monthly data tracking report on the IT hardware industry released by Morgan Stanley, Apple's (AAPL.US) App Store net revenue continues to exceed expectations, with a year-on-year growth of 12.2%, showing no significant impact from external link risks. At the same time, the delivery time for the iPhone 16 series has significantly shortened, notebook ODM production has been raised, and cloud capital expenditures are growing strongly. However, the number of consulting positions at IBM has significantly declined, indicating weak demand. Overall, the technology hardware sector is performing steadily, but risks are emerging in some sub-sectors.

App Store Revenue Growth Shines, Unfazed by External Link Risks

The report indicates that as of August 17, the App Store's net revenue for the month grew by 11.1% year-on-year, a decrease of 170 basis points from July, but the year-to-date growth is 12.2%, still 20 basis points above Morgan Stanley's expectation of 12.0% for the September quarter, translating to an upward space of 10 basis points (approximately $20 million) for service growth expectations.

From a market perspective, the net revenue growth of the App Store in the United States, China, and Japan has slowed compared to July. The U.S. saw a year-on-year growth of 10.5% for the month (down from 12.4% in July), China saw a growth of 5.6% (down from 6.0% in July), and Japan saw a growth of 0.5% (up from 0.3% in July). Meanwhile, the net revenue growth of the App Store in other regions worldwide grew by 21.0%, slightly down from 21.4% in June.

In terms of categories, game net revenue grew by 2.6% year-on-year in August, a significant decline of 560 basis points from July's 8.2%; non-game App Store revenue grew by 19.7% year-on-year, down 280 basis points from July's 22.5%, with growth mainly driven by productivity, photo and video, and entertainment app categories. Notably, despite the external link risks arising from Apple's loss in the Epic lawsuit, the revenue growth of the U.S. App Store generally aligns with the monthly trend, and net revenue per download grew by 8% year-on-year, indicating that Apple's monetization capability in the U.S. App Store has not been significantly affected.

Notebook Production Expectations Raised, but Fourth Quarter May Face Pressure

The production forecast for notebook original design manufacturers (ODMs) has been raised, with an expected 33.6 million units in the third quarter, a 1% increase quarter-on-quarter, exceeding previous expectations. This is mainly due to strong production in July (13% above expectations), which is expected to drive third-quarter notebook shipments to 49.6 million units, a 5% increase quarter-on-quarter. However, Morgan Stanley warns that fourth-quarter shipments may fall short of expectations, as ODMs maintain a conservative outlook for low single-digit growth for the year. The report states: "Production data for August and September will be key indicators, and we need to be cautious of seasonal weakness risks."

IBM Consulting Job Postings Plummet, Cloud Capital Expenditure Soars

The job posting situation for IBM (IBM.US) consulting business shows that as of August 18, the number of active job postings has decreased by 26% compared to the end of the second quarter, with a 90-day rolling average down by 16%. Morgan Stanley pointed out that this poses a negative signal for consulting business growth in the third quarter and may indicate downside risks for IBM's consulting revenue expectations for the remainder of 2025. The firm cautioned, "If the reduction in job postings continues, it will reflect weak demand, and future data should be closely monitored in the coming weeks."

In contrast, cloud capital expenditure has performed well, with a forecasted growth of 58% to $451 billion in 2025, up 2 percentage points from two weeks ago. The consensus capital expenditure revisions from Amazon (AMZN.US), Microsoft (MSFT.US), and Apple have driven this growth, with the weighted average capital expenditure intensity for the top 11 cloud service providers expected to be 18.6%, an increase of 5.5 percentage points from 13.1% in 2024. However, for 2026, the market consensus predicts a year-on-year growth of 16% in cloud capital expenditure, still below Morgan Stanley's forecast.

iPhone 16 Delivery Times Shorten, Demand in Chinese Market Diverges

Delivery time tracking for the iPhone 16 shows that as of August 19, the delivery times for the iPhone 16 Pro Max, iPhone 16 Pro, iPhone 16 Plus, iPhone 16e, and iPhone 16 are all 2 days. Compared to historical data, the delivery times for each model show different trends. Additionally, the delivery times for the iPhone 16 series in international markets are generally longer than in the United States.

In the Chinese smartphone market, the total shipment volume in May was 22.5 million units, a year-on-year decrease of 21%; iPhone shipments in China fell by 10% year-on-year in May, while domestic brands saw a 24% year-on-year decline. In June, according to IDC data, iPhone shipments grew by 6% year-on-year, while non-Apple (Android + Huawei) smartphone shipments decreased by 24% year-on-year It is important to note that there is a persistent gap in the statistics of shipments in China between Apple/international suppliers as reported by IDC and CAICT.

Google search intensity data shows that the search intensity for the iPhone 16 is roughly comparable to that of the iPhone 15, iPhone 14, iPhone 13, and iPhone 12 50 weeks after their release; while the search intensity for the fourth-generation iPhone SE (renamed iPhone 16e) is lower than that of the first and second-generation iPhone SE 27 weeks after its release.

Other Key Data

In addition, a Morgan Stanley report shows that the delivery time for all models of Apple Vision Pro is 3 days, indicating stable demand; the proportion of AI-related positions at Apple has increased from 10% six years ago to 26%, with deep learning accounting for 60% of AI positions and natural language processing (NLP) accounting for 30%, demonstrating Apple's continued investment in the AI field; consumer electronics net spending willingness is at -11%, down 1 percentage point from last month; the hard disk drive (HDD) market is expected to see a 0.5% decline in shipments by 2025, but ASP is projected to grow by 14%, driving industry revenue growth of 14%