<table><tr><th>From:</th><th>Richard Kahn</th></tr><tr><td>Sent:</td><td>Tuesday, September 12, 2017 7:51 PM</td></tr><tr><td>To:</td><td>jeffrey E.</td></tr><tr><td>Subject:</td><td>Fwd: Apple, Inc.: Apple sets the stage for Augmented Reality to become the next killer
app on smartphones</td></tr></table>

Richard Kahn
HBRK Associates Inc.
575 =exington Avenue 4th Floor
New York, NY 10022
tel 212-971-1306
fax 212-320-0381

Begin forwarded message:

From: =/b>"Morgan Stanley" <

Subject: =/b>Apple, Inc.: =pple sets the stage for Augmented Reality to become the next killer app =n smartphones

Date: September 12, 2017 at 3:20:14 PM EDT

To: =/b><richardkahn12@gmail.com>

Reply-To: =/b><mswmir-cie-feedback@morganstanley.com>

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Apple, Inc.: Apple =ets the stage for Augmented Reality to become the next killer app on =martphones

## Katy L. Huberty, CFA =E2 Morgan Stanley

## September=12, 2017 7:17 PM GMT

Following the early release =f ARKit at June's WWDC, Apple spent a significant amount of =ime on the advanced camera functionality in the iPhone 8, 8 Plus and X, =nd Augmented Reality features in iOS11 available to the majority of =Phone users upon download starting September 19. Demos included games =arhammer 40,000: Freeblade, SkyGuy and Directive Games new multiplayer =ame The Machines. We believe AR has the potential to become the next =iller app that accelerates smartphone upgrades and drives increased =ervices monetization and growth, which is reflected in our $253 bull =ase valuation, representing close to 60% upside vs. Apple's =urrent share price. For more details on why we think AR will be the =ext big smartphone technology trend, how Apple fits into the AR =cosystem, and the $400B impact AR could have on the technology market, =lease see our recently published Global Insight note here: https://ny.matrix.ms.com/eqr/article/webapp/2112f296-7923-11e7-=de2-c77bdd04406b?ch=rpintatsch=afr

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