Morgan Stanley analyst Katy Huberty disagrees with other Apple analysts mostly on one estimate: what the average selling price of an iPhone will be next year.
Huberty writes in a research note distributed on Thursday that she estimates the average iPhone will sell for $753 in 2018, which is significantly higher than the Street’s consensus of $675.
Apple is believed to be launching a high-end iPhone this fall that is rumored to cost as much as $1,000. This year’s iPhone could have a “more power efficient OLED display, wireless charging, 3D sensors, and a new curved form factor,” according to Huberty.
Apple is also increasingly selling more iPhone 7 Plus models, which have a bigger screen than the iPhone 7 and cost over $100 more.
Both of these trends point Huberty’s models to a more expensive average selling price for iPhones in the future.
Ultimately, Huberty sees a “clear path to supercycle,” which is the investor belief that a built-up group of people hanging onto older phones are ready to upgrade as soon as Apple launches a new, desirable iPhone model.
The “supercycle [is] not reflected in consensus iPhone shipments,” Huberty writes. “Our upgrade analysis, which covers regions that represented 96% of iPhone shipments in CY16, points to base case of 260M (top down) to 264M (bottom up) demand during the FY18 Supercycle and implies at least 7% upside to current consensus forecast of 242M.”
Morgan Stanley raised its price target for Apple to $161 from $154.