by , 10:35 AM EDT, June 18th, 2008

Morgan Stanley analysts think sales of Apple's already popular iPhone are set to explode and could double in 2009 thanks to the iPhone 3G's lower price. Consumer demand could lead to 27 million iPhones sold in 2009 for an average revenue of US$550 per unit, according to Reuters.

Analysts told investors "We believe the market generally expects a doubling of iPhone units with the lower price point ($199) and we believe this is realistic, if not conservative."

Apple's iPhone 3G will go on sale on July 11 in 22 countries, and will move out to over 70 countries by the end of the year. It includes 3G wireless data connectivity, a built-in GPS, and access to Apple's App Store and third-party applications -- features that will likely help drive up interest in the iPhone.

The second generation iPhone will ultimately be a catalyst for higher margin software sales and service revenue, according to Morgan Stanley analysts.

Morgan Stanley has raised its target price for Apple's stock from $185 up to $210. Apple is currently trading at $179.14, down 2.29 (1.26%).