Apple making no change to its iPhone builds despite reports of weak demand

Investing.com -- Apple is maintaining its planned iPhone production levels, according to a note from Morgan Stanley on Tuesday.

Despite reports of weaker demand, analysts at Morgan Stanley confirmed that "no adjustment to iPhone component shipments/builds" has been made for the fourth quarter.

According to the bank, Apple (NASDAQ:AAPL )'s iPhone 16 production for the December quarter remains unchanged at 76 million units.

Morgan Stanley highlights that iPhone 16 lead times—how long customers must wait to receive new devices—remain shorter compared to the previous three iPhone cycles.

As of October 11 (28 days after pre-orders began), lead times for the iPhone 16 and 16 Plus models are said to be just four days in the U.S., while the iPhone 16 Pro Max stands at 28 days.

"Lead times have extended by 2 days vs. T+25, showing stabilization," Morgan Stanley noted, adding that this is "more encouraging than the contraction in lead times seen from the iPhone 15 at this point last cycle."

Morgan Stanley added that supply chain issues are less of a concern this year.

"Apple has asked its suppliers to prepare component inventories earlier than typical patterns to avoid supply constraints," Morgan Stanley wrote.

The proactive approach is said to be in contrast with previous years, where supply shortages caused mismatches between supply and demand, particularly for the Pro models.

Additionally, the analysts pointed to new data from IDC, which revealed that iPhone shipments for the September quarter reached 56 million units—7-12% above expectations. Morgan Stanley explains that suggests $2-4 billion in potential revenue upside for Apple's third quarter.

"We believe that better supply conditions are one of the contributing factors to why iPhone lead times are shorter this cycle than in recent cycles," concluded the bank.

Source: Investing.com