Four reasons Apple Inc. (NASDAQ:AAPL)’s best moments are in the future according to Morgan Stanley
It seems the best of Apple Inc. (NASDAQ:AAPL)’s moments in smartphone business have not been seen - they are in the future. According to Katy Huberty of Morgan Stanley (NYSE:MS), there are at least four factors that make her confident of Apple’s long-term growth. One of the factors is strong customer loyalty for Apple’s iPhone.
Just as Apple Inc. (NASDAQ:AAPL) prepares to release its September quarter (F4Q2015) results, Huberty has updated her predictions for the company to reflect what she believes to be the new reality. Moreover, Huberty has outlined four points she believes makes Apple an exception player in the smartphone market.
Strong update
Even before Apple steals share from Alphabet Inc (NASDAQ:GOOGL)’s Android or Microsoft Corporation (NASDAQ:MSFT)’s Windows, Huberty says that there is so much value for the company to extract from its existing install base. According to Huberty’s checks based on the famous AppleWise survey, at least 60% iPhone owners in the U.S. intend to upgrade their devices in the next 12 months. That’s up from 47% in last December survey. In China, 74% iPhone owners are planning to upgrade in the next one year.
Strong brand loyalty
In the U.S. iPhone customer loyalty has only continued to get better, reaching 93% as opposed to 89% in the last December. In China, iPhone customer loyalty has improved materially to 80% from 75% a year ago.
iPhone likely to defy macroeconomic weakness in China
In China, at least two-thirds of smartphone users have expressed interest in spending more on their next handset. In country where owning an iPhone is something like a badge of honor, it is safe to conclude thatApple Inc. (NASDAQ:AAPL) will benefit from high spending on smartphones by Chinese.
New iPhone models to drive demand
The iPhone 6/6 Plus have been a source of strong demand for Apple’s iPhones over the last 12 months. The launch of iPhone 6S/6S Plus is expected to continue the virtuous cycle. Design improvement and more storage on iPhone are also expected to stabilize demand.
Based on the highlightedApple Inc. (NASDAQ:AAPL) strengths,Huberty has hiked her fiscal 2016 iPhone sales prediction to 248 million units from 240 million units in the previous note. Additionally, the analysts expect Apple’s share price to shoot to $162 over the next 12 months, up from $155 that she previously predicted.
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