Morgan Stanley analyst Katy Huberty Monday morning raised her target price on Apple to $310 a share, up from $275, and also increased her prediction for iPhone sales in 2011 to 61.5 million device, a 25 percent premium on Wall Street consensus.
Huberty told investors her more bullish predictions are based on the following insights: The iPhone continues to gain market share, while the Cupertino, Calif. company continues to experience greater-that-expected demand for its new iPad. Also contributing factors: there is still room to grow in China and the once reluctant corporate market is beginning to open up to the iPhone.
Those insights come from an internal Morgan Stanley/Alphawise survey. The survey finds:
A large uptick in the number of people expecting to upgrade their iPhones. In November 2009, just 18 percent of those surveyed said they planned to upgrade, versus 58 percent in March 2010. That greater desire to upgrade could result in 19 million upgrades in 2011, according to Huberty.
Huberty expects Apple will cut the iPhone 3GS to $99, possibly when the company unveils its iPhone 4G this summer. Also AT&T could goose iPhone sales another 7 million units if the carrier lowered monthly services prices to $75 from the current $90.
If Verizon, a carrier often mentioned as next on the list to receive the iPhone, gets a nod from Apple, the move could add another 8 million iPhone sales. The Alphawise survey found 16.8 percent of Verizon customers “very likely” to purchase an iPhone if it is sold by their network.
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