Apple is gearing up for a stronger-than-expected holiday season as Morgan Stanley analysts revised their iPhone 16 build forecasts upward. The investment bank’s Greater China Technology Hardware team increased its September quarter estimates by 8%, raising production from 50 million to 54 million units.
iPhone 16 Leads the Increase
The revised figures stem entirely from the iPhone 16 and iPhone 16 Pro Max, with two million additional units added to each model. A robust June quarter helped reduce iPhone channel inventory below typical levels, creating room for replenishment. As a result, Morgan Stanley projects shipments of about 55 million units for September, slightly higher than the updated build figure.
December Quarter Outlook
The December quarter traditionally sees the steepest production climb, with builds historically rising between 35% and 71% compared to September. Based on the new baseline of 54 million units, Morgan Stanley projects 73 million to 92 million builds. Shipments are expected to fall between 76 million and 84 million, aligning closely with the firm’s current forecast of 78 million shipments.
Market Sentiment Shifts
For much of 2025, Apple faced skepticism due to sluggish product growth, regulatory hurdles, and uncertainties surrounding its artificial intelligence strategy. However, recent signs suggest a shift in sentiment. Tariff risks have lessened, regulatory pressures eased, and Apple Services pricing has remained steady for two years—providing potential room for future adjustments.
Looking Ahead to iPhone 17
Despite the optimism, Morgan Stanley maintained its iPhone 17 build forecast at 80 million to 85 million units for late 2025, roughly in line with 2024’s 84 million units. This suggests flat to slightly lower year-over-year growth. Analysts argue that while Apple’s AI roadmap remains unclear, even modest product and services growth could support stronger stock performance. The upcoming iPhone 17 launch will serve as a key indicator of whether Apple can sustain its momentum.
