<table><tr><th>From:</th><th>Richard Kahn ◄</th></tr><tr><td>Sent:</td><td>Wednesday, August 2, 2017 1:52 AM</td></tr><tr><td>To:</td><td>Jeffrey Epstein</td></tr><tr><td>Subject:</td><td>Fwd: Apple, Inc.: Revving Up Ahead of Supercycle</td></tr></table>

Richard Kahn
HBRK Associates Inc.
575 =exington Avenue, 4th Floor
New =ork, NY 10022
tel 1███████████
fax ███████████
cell ███████████

Begin forwarded message:

From: =/b>"Morgan Stanley" ██████████████████████████m>

Subject: =/b>Apple, Inc.: =evving Up Ahead of Supercycle

Date: =/b>August 1, 2017 at 9:32:24 PM =DT

To: =/b██████████████████████████>

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

<http://www.morganstanley.com/img/cs/spacer.gif>
<http://www.morganstanley.com/img/cs/spacer.gif>
<http://www.morganstanley.com/img/cs/spacer.gif>
<http://www.morganstanley.com/img/cs/spacer.gif>
Wealth =anagement

<http://www.morganstanley.com/>

<http://www.morganstanley.com/img/cs/spacer.gif>
Apple, Inc.: Revving =p Ahead of Supercycle

## August =, 2017 1:25 AM GMT

Strong results and guidance =tear the path for AAPL shares to outperform in the early innings of an =Phone supercycle.

Our FY18 ests remain well ahead of consensus as we =ee faster upgrades, increased switchers and ecosystem benefits like =ccelerating services growth. Maintain OW, $182 PT. We =emain bullish heading into the iPhone supercycle where we see 23% =Phone unit growth supported by a 20% increase in the base of aged =two-year old) iPhones and AlphaWise data that highlights meaningful =pportunity to win switchers, particularly in China. The new, higher =riced OLED iPhone will also pull ASPs up by 14% and while we model =Phone gross margin down in FY18, recent tailwinds suggest this may =rove conservative. Net, our FY18e EPS of $11.80 is 10.6% above =onsensus. We see shares trading to 15.4x which is where the stock =eaked during the iPhone 6 cycle, driving our (unchanged) $182 PT.Key =akeaways from the quarter:Demand recovery is even stronger than first =lush. June revenue of $45.48 beat consensus by $500M but would've beat =y more if not for record low iPhone channel inventory. Apple reduced =Phone channel inventory by 3.3M, more than 2x the three-year June =uarter average, which represents an incremental $1.48, or 3%. Even with =he channel inventory headwind, revenue growth accelerated to 7%, from =% in the prior quarter, and grew across all key product categories - =Phone (+3%), iPad (+2%), Mac (+7%), Services (+22%) and Other (+23%; =ncludes Watch, AirPods and accessories).iPhone Supercycle on track for = fall launch. Despite investor concerns that OLED iPhone shipments =ould push to Nov/Dec or even next year, management guided September =uarter bullishly and sounded confident on upcoming product launches =his fall. We increase our September quarter iPhone unit shipment =stimate by 6M to 43M units, in part due to higher overall demand but =lso due to some of the new products likely contributing later in the =uarter. As a result, we pull forward 4

This alert is sent from:
Andrew Atlas, Andrew.Atlas@morganstanley.com

You received this because you requested =hat you receive content and reports from:

APPLE =NC.

Please contact your FA if you want to unsubscribe from the =lerts.

<http://www.morganstanley.com/img/cs/spacer.gif>
<http://www.morganstanley.com/img/cs/spacer.gif>
<http://www.morganstanley.com/img/cs/spacer.gif>

<http://www.morganstanley.com/img/cs/spacer.gif> Disclosures:
Please see =he full report for risks, disclosures and other important =nformation.

Important disclosures regarding the =elationship between the companies that are referenced in Morgan Stanley =esearch and Morgan Stanley Wealth Management research are available on =he Morgan Stanley Wealth Management disclosure website at https://www.morganstanley.com/online/researchdisclosures.

Morgan Stanley Wealth Management Not Acting as Municipal =dvisor Morgan Stanley Wealth Management is not acting as a municipal =dvisor to any municipal entity or obligated person within the meaning =f Section 15B of the Securities Exchange Act (the "Municipal Advisor =ule") and the opinions or views contained herein are not intended to =e, and do not constitute, advice within the meaning of the Municipal =dvisor Rule.

## August =, 2017 1:25 AM GMT (cont.)

## Copyright

The =opyright in materials provided by Morgan Stanley is owned by Morgan =tanley & Co. LIC. Morgan Stanley Wealth Management is the trade =ame of Morgan Stanley Smith Barney LLC, a registered broker•dealer in =he United States.

<table><tr><th>© 2017 Morgan Stanley Smith Barney LLC. Member =IPC.
&lt;http://www.morganstanley.com/img/cs/spacer.gif&gt;
&lt;http://www.morganstanley.com/img/cs/spacer.gif&gt;
&lt;http://www.morganstanley.com/img/cs/spacer.gif&gt;</th><th>&lt;http://www.morganstanley.com/img/cs/spacer.gif&gt;</th></tr><tr><td>&lt;http://www.morganstanley.com/img/cs/spacer.gif&gt;
&lt;http://www.morganstanley.com/img/cs/spacer.gif&gt;</td><td>&lt;http://www.morganstanley.com/img/cs/spacer.gif&gt;</td></tr></table>