Apple is poised to sell the iPhone 6 in big numbers, and will charge more for the expected bigger display, according to Canaccord Genuity analyst Michael Walkley. He thinks high demand plus a bigger price tag will turn into even more sales worldwide, so he's raising his target price for the company's stock from US$102 up to $112.
"We believe the extended replacement rates combined with new larger-screen iPhones position Apple with its large installed base for record iPhone 6 sales," Mr. Walkley said. "We believe Apple will charge a premium for these larger-screen iPhones resulting in stable gross margin trends for overall Apple but with a higher gross margin dollar contribution due to an increasing revenue mix from higher ASP iPhones."
Apple hasn't announced the next iPhone model yet, but there have been plenty of leaks and rumors from which to craft an idea about what it'll look like and include. Those rumors and leaks paint a picture of a 4.7-inch display, and possibly a 5.5-inch version, a thinner body that more closely matches the iPad Air and iPad mini, a faster processor, longer battery life, and improved cameras.
A video hit YouTube recently showing what looks like the front glass from the 4.7-inch model surviving a scratch test and extreme flexing. That glass is presumed to be synthetic sapphire from Apple's own production line.
Mr. Walkley's new $112 target price for Apple's stock keeps his previous "Buy" rating. Apple is currently trading at $95.52, up 0.49 (0.51%).