Apple iPhone 12 Will Feature 5G As Morgan Stanley Raises Price Estimate


Apple scored a huge win with the 2019 iPhone lineup. The company has finally provided users of older iPhones a great incentive to upgrade through the iPhone 11. And early market reports have suggested that the LCD smartphone is selling better than its OLED counterparts are. However, this win serves only to temporarily dam the flood Apple's been skittling around. It's a given fact that the smartphone industry has matured, and for a company that's been lazy and profiting majorly from only one product, it's time to shake things up.

On that note, we've got analyst reports from Morgan Stanley and Goldman Sachs for Apple's future product plans. Take a look below for more details.

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Morgan Stanley Optimistic About Apple TV, iPhone Demand; Raises Apple Share Price Target To $289

Analyst Kate Huberty of Morgan Stanley is a regular at the company's quarterly conference calls. Today she's out with estimations of what the bank expects Apple (NASDAQ:AAPL) to achieve with its services segment and the iPhone next year. Following the aforementioned smartphone troubles, Apple's new strategy is to capitalize on it existing user base through service monetization.

To that end, the company launched the Apple Card earlier this year, and now, Morgan Stanley believes that the Apple TV will provide the company with a cool $9 billion in revenue by the fiscal year 2025. For reference, Services as a segment netted Apple $37 Billion in the fiscal year 2018. The $9 billion revenue will be generated through 137 million customers, believes the bank, based on the assumption that only 1 of 10 Apple users pay the $4.99 monthly Apple TV fee.

Apple 2018 earnings.

Moving towards the iPhone, Huberty corroborates reports that Apple (NASDAQ:AAPL) will launch a 5G smartphones in 2020. We've seen multiple reports mentioning this; some believe that the iPhone 12 lineup will feature 5G across the board, while others believe that only the higher-end smartphones will have the next generation cellular connectivity. In fact, Morgan Stanley is quite optimistic about the iPhone's sales cycle. The bank believes that iPhone sales will return to growth due to replacement cycles peaking.

All these factors have led Morgan Stanley to increase its price target for an Apple share to $289 from $247 - the highest among 33 analysts covering Apple as noted by CNBC. The iPhone 12 lineup might feature a new design if rumors are believed. However, it's unlikely that Apple will manage to squeeze in Face ID hardware inside the smartphone's top bezel.

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“With a growing list of catalysts, including accelerating Services growth and multiple expansion ahead of the 5G iPhone launch, and an attractive 8% total dividend + buyback yield, we continue to view Apple as our top pick into 2020,” writes Kate Huberty.

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