Apple: iPhone 16 lead times stabilizing - Morgan Stanley

Investing.com -- According to Morgan Stanley analysts, lead times for Apple (NASDAQ:AAPL)'s iPhone 16 Pro and Pro Max models are stabilizing and even extending, marking an unexpectedly positive development.

The bank said that as of September 27, iPhone 16 lead times remain shorter than those seen in the last three iPhone cycles, but the recent stabilization of the iPhone 16 Pro/Pro Max models is noteworthy.

"At T+14, iPhone 16 Pro/Pro Max lead times have both extended by 2 days vs. T+11, vs. iPhone 14&15 Pro/Pro Max lead times contracting 4-5 days at this point," Morgan Stanley analysts stated.

This elongation suggests that the iPhone 16 Pro/Pro Max demand trajectory is more closely aligned with the successful iPhone 12 and 13 cycles rather than the weaker iPhone 14 and 15 models.

"We are seeing this same trend internationally too, with lead times for the iPhone 16 Pro/Pro Max extending by ~2 days, on average, vs. last Tuesday in all regions but Chin," the bank said.

Morgan Stanley added that this extension resembles the trajectory seen with the iPhone 12 and 13 models, which also experienced elongating lead times due to supply chain disruptions. However, no such disruptions have been reported for the iPhone 16 models.

Although Apple recently adjusted its wafer orders at TSMC, Morgan Stanley does not believe this reflects softening demand for the iPhone 16.

"Apple likely has excessive processor inventories," the analysts pointed out, emphasizing that the wafer adjustment is not a direct indication of current demand trends.

While Morgan Stanley's view on the iPhone 16 cycle remains unchanged, they are closely watching this emerging trend of stabilizing lead times as a potentially positive indicator.

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