Higher Prices Begets Higher Earnings

Research evidence excerpt

Higher Prices Begets Higher Earnings

IdeaMiPhone demand through FY27 and FY28. Three upcoming catalysts to watch: (1) June

quarter results and September quarter guidance (which we'll preview more

formally), (2) the September (iPhone 18 Pro/Pro Max/Foldable) iPhone launch, and

(3) the public beta release of Siri AI.

Exhibit 1: While Mac Studio and Mac mini lead times remain elevated due to

processor supply constraint, lead times for newly released Macs are largely stable

W/W as of July 9

Mac Lead Times

MacBook Air M5 (2026) Mac Studio M4 Max/M3 Ultra (2025)

Mac mini M4 (2024) MacBook Pro M5/M5 Pro/M5 Max (2026)

MacBook Pro M5 (2025) MacBook Neo A18 (2026) price hikes

90.1

64.0

60 Days

26.1

20 19.6

12.9

0 2.1

31-Oct-24 30-Nov-24 31-Dec-24 31-Jan-25 28-Feb-25 31-Mar-25 30-Apr-25 31-May-25 30-Jun-25 31-Jul-25 31-Aug-25 30-Sep-25 31-Oct-25 30-Nov-25 31-Dec-25 31-Jan-26 28-Feb-26 31-Mar-26 30-Apr-26 31-May-26 30-Jun-26

Source: Apple.com, Morgan Stanley Research

Exhibit 2: iPad lead times are 1-2 days as of July 9, fairly accessible compared

to Mac

iPad Lead Times

iPad iPad Pro iPad Air iPad Mini All iPads

4 Days

price hikes

First, we dug deep into the history books to find all examples of Apple price

hikes across mainstream Hardware devices. We estimate elasticity is between

0.2-1.0. Working with our Sector Quant team, we analyzed the relationship

between pricing and unit shipments across prior product cycles and estimate

historical Apple mainstream Hardware elasticity at roughly 0.2-1.0 ( Exhibit 3 ).

While far from a perfect exercise – for example, Apple has not meaningfully

increased like-for-like iPhone pricing in 5+ years, leaving us with a limited sample

size – the analysis nonetheless suggests that Apple's mainstream hardware, notably