The iPhone 6 upgrade cycle could last a year: Morgan Stanley added Apple to its list of Best Ideas this morning. Apple analyst, Katie Huberty, has an Overweight rating and $110 price target on the shares. Her AlphaWise survey shows demand for 37 million iPhones in the September quarter with channel fill adding 1 million units for a total of 38 million to be reported as sold.
While some analysts believe the iPhone upgrade cycle lasts until at least the March 2015 quarter, Huberty believes it can potentially go until 2016 not just due to older models being upgraded but also from Apple Pay and Apple Watch driving additional demand.
Fox News noted that analysts led by Katy Huberty wrote in a note to clients that "Near-term, we see potential for gross margin upside, which correlates to share performance, and expect a bullish C4Q outlook out of Apple."
Apple Purchase Intentions have Jumped Dramatically
One of the eye-popping aspects of Huberty’s survey shows us a huge jump in "purchase intentions" for Apple’s iPhones in China going from 24% a year ago to 50% today.
Another interesting point in the chart is that while Apple's fortunes could be dramatically increased, Samsung's fortunes could lose significant market share since its "purchase intentions" dropped from 30% to 13%.