Morgan Stanley confident fears over Apple slump are overblown
Analysts at Morgan Stanley reiterated their 'overweight' rating on Apple, insisting the tech giant will put its recent wobble behind and post solid growth in the second half of 2015 and in 2016.
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Shares in the iPhone maker have fallen over 12% since it posted quarterly results two weeks ago, as investors have grown worried that iPhone sales will decline in 2016.
However, Morgan Stanley's analysts believe iPhone sales will grow approximately 3% next year, supported by continued upgrades of the installed base and "the compelling value proposition of a discounted iPhone".
The brokerage believes that Apple is only a third of the way through the phone's upgrade cycle, given that just 27% of the 82% US consumers who planned to upgrade their phones have done so, which means Apple could see sales accelerate in the next 12 months as more users switch to a newer handset.
In a note on Thursday, the bank added continued strength in iPhone 6 sales - sales of Apple's latest phone jumped 35% year-on-year in June - despite challenging market conditions was further proof that, while non immune to the current weakness in the China market, the California-based group was able to convert "previously mid-market smart phone purchasers to their platform."
Apple shares were up 0.06% to $114.95 at 1548 BST on Thursday.