Canaccord Raises AAPL Target to $145, Cites iPhone 6 Market Dominance

The iPhone 6 and iPhone 6 Plus are drawing Android smartphone users into the Apple camp, and the company took in 93 percent of the smartphone market's profits, too. Canaccord Genuity analyst Michael Walkley thinks Apple will continue to dominate the smartphone market, so he's raising his target price for the company's stock from US$135 up to $145.

Canaccord's Michael Walkley thinks iPhone sales are going to keep going upCanaccord's Michael Walkley thinks iPhone sales are going to keep going strong

Mr. Walkley said only a small percentage of the iPhone user base has upgraded to the iPhone 6 line, and that user base is going to keep driving up sales of the newest models. In a note to investors he said,

We believe the strong iPhone 6 replacement sales should continue during [calendar year] '15, as we estimate only 15 percent of the current estimated 404 million iPhone installed base has upgraded to the new devices. We also anticipate continued strong share gains for the larger screen iPhones from high-tier Android smartphones during [calendar year] '15 driving strong growth in the iPhone installed base and model the iPhone installed base growing to 487 million subscribers exiting 0215 up 20 percent year over year.

The iPhone user base could hit 650 million by the end of 2018, which would still account for only a third of potential smartphone subscribers worldwide.

Mr. Walkley added, "We anticipate steady long-term iPhone replacement sales within this growing iPhone installed base, and we believe this combined with our modest installed base growth expectations position Apple for steady sales of roughly 210-215 million iPhone units annually between 2015 to 2018."

Apple's strong position in the smartphone market and potential for continued dominance has Mr. Walkley seeing an ongoing positive future for the company. Along with his new $145 12-month target price, Mr. Walkley is maintaining his "Buy" rating for the company's stock. Apple is currently trading at $118.91, down 0.02 (0.02%).