Morgan Stanley cuts estimate of 2017 iPhone shipments, adds to the 2018 forecast

Morgan Stanley's tech analyst Katy Huberty made some changes today to her official estimates for Apple. She now expects iPhone revenue for fiscal year 2017 (which ends in late September 2017) to drop 3% from earlier forecasts. During the second half of this current fiscal year, consumers will most likely hold off on purchasing the iPhone until the new models are unveiled. Huberty also cut her Fiscal Year 2017 iPhone shipments by 7%, while hiking the average selling price by 4% thanks to higher pricing for the Apple iPhone 7 Plus.

For the just completed December quarter, Huberty sees Apple shipping 75 million iPhone units, down from her previous forecast of 79 million. For the March quarter, the analyst cut her forecast also by 4 million handsets to 51 million units from 55 million. Things will start popping with the next gen iPhone models that should be unveiled during Apple's fiscal fourth quarter of 2017. We expect to see the Apple iPhone 7s, Apple iPhone 7s Plus and the premium Apple iPhone 8 (code named "Ferrari") released at the time. The latter could have an edge-to-edge AMOLED display with Touch ID embedded under the glass. This model might feature rapid charging and wireless charging.

For fiscal year 2018 (which runs from October 2017 through September 2018), iPhone shipments will rise 20% year-over-year according to Huberty. Revenue from the device will increase 6% on an annual basis. The ASP will increase by 6% from fiscal year 2017, and 253 million units are expected to be shipped.

The analyst still has Apple rated overweight with a target of $148, which would be a 23% rise from today's close of $120.

source: SeekingAlpha