<table><tr><th>From:</th><th>Richard Kahn</th></tr><tr><td>Sent:</td><td>Wednesday, February 1, 2017 1:42 PM</td></tr><tr><td>To:</td><td>jeffrey E.</td></tr><tr><td>Subject:</td><td>Fwd: Apple, Inc.: Smooth Sailing Into Supercycle</td></tr></table>

stock 127 premarket

shares owned: 414,000
cost basis: 98.19
unrealized gain: =nbsp;11,927,368
total position value: =/span>52,578,000

Richard =ahn
HBRK Associates Inc.
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Begin forwarded message:

From: =/b>"Morgan Stanley" <ms████████████████████
Subject: =/b>Apple, Inc.: =mooth Sailing Into Supercycle
Date: =/b>January 31, 2017 at 9:26:29 PM =ST
To: =/b>█████████████████████████████████
Reply-To█████████████████████████████████

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=ebruary 1, 2017 =0:p class=""> =/span>

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=

Apple, =nc.: Smooth Sailing Into Supercycle

Katy L. Huberty, CFA — Morgan =tanley

## February 1, 2017 2:21 AM =MT

Apple is =ur top pick with the upcoming iPhone supercycle accentuated by the =ossibility of repatriation, tax reform, and M&A. Stronger Dec =uarter and better than feared March guidance pave the path to our base =ase of $150, with $190

bull case becoming increasingly likely. December quarter suggests platform story intact. Over 20% normalized =ervices revenue growth, re-accelerating iPhone unit growth, and =onstraints across several products are encouraging signs customer =oyalty remains high and growth will accelerate further with new =roducts expected to launch later this year. We are also encouraged by =ainland China returning to growth (1) at constant currency, which is =onsistent with the acceleration recently reported by BABA. Growth in =ac, iPad, and Services revenue in China supports our view that users =emain loyal to the platform but many are waiting for a new iPhone form =actor to upgrade.March quarter guidance better than feared. The =id-points of revenue and gross margin guidance are above our recently =owered estimates as improving China demand, normalization of supply, =nd price concessions from suppliers help offset currency risk. While =he pace of recovery could slow in June as Apple prepares for its =iggest iPhone launch in three years, we expect the market to look =hrough any weakness as was the case ahead of iPhone 6.We're =ncreasingly convinced Street estimates are too low for FY18. iPhone =eturned to growth despite no major form factor change and currency =eadwinds during the December quarter. iPhone engagement and loyalty =ates remain high, supported by 21% Services revenue growth (backing out =548M litigation benefit a year ago). New OLED displays, improved =attery technology, and a redesigned form factor at the high-end of the =ortfolio are likely to accelerate upgrade rates in FY18. China will =ead growth, in our view, and could account for all incremental iPhone =hipments embedded in consensus models next year, even if the upgrade =ate d

## February 1, 2017 2:21 AM =MT (cont.)

This =lert is sent from:

=ndrew Atlas, =a href="mailto

=lass="""">Andrew.Atlas@morganstanley.com

=/p>

=ou received this because you asked to be alerted to:

APPLE=INC. =br class=""> Please contact your FA if you want to unsubscribe from =he alerts. =/p> =span style="font-size: 10.0pt; color: #666666" class=""> = =br class="webkit-block-placeholder"> =span style="font-size: 10.0pt; color: #666666" class=""> = =br class="webkit-block-placeholder">

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