Morgan Stanley Says AAPL's Market will Grow to $3.4 Trillion

Apple's US$800 billion market could grow to $3.4 trillion in the next five years, according to Morgan Stanley analyst Katy Huberty, because every aspect of the iPhone and iPad maker's business is poised to expand even more. That growth will come because Apple is poised to be a bigger part of our daily lives with Apple Watch, Apple Car, and Apple TV.

Morgan Stanley says Apple's current and new product lines are going to make serious moneyMorgan Stanley says Apple's current and new product lines are going to make serious money

Ms. Hubert told investors tech companies have to expand their platforms or face losing marketshare to competitors, and Apple gets this. She said,

These companies want their products and content to be ubiquitous and available everywhere, and/or they want their tools and devices to proliferate and become the preferred way to access content. It is both offensive — to gain more of the users' attention — and defensive — to make sure their competitors are locked out or do not lock them out of a medium to reach users. As products and content becomes accessible anywhere, the only constraint left is time.

Apple already has our eyes thanks to the Mac and iPhone, and the amount of time the company has our attention will grow even more once Apple Watch ships. Ms. Huberty said Apple could even invade our sleep time if Apple Watch can monitor our sleep patterns. She expects 10 percent of iPhone owners will buy an Apple Watch.

She sees Apple Car as another area where Apple can win more of our time. The majority of time Americans spend traveling is in private cars. That makes up about 10 percent of our free time, and that's a market Apple can tap.

Ms. Huberty doesn't think Apple will make its own cars despite reports to the contrary, but she does see Apple taking over our dashboards to become a new screen along side our computers, smartphones, and televisions.

Apple TV is another growth area for Apple because American 15 and older average three hours a day in front of their televisions. Assuming Apple can curate new content for Apple TV, it could draw more eyes into its ecosystem.

All three areas represent markets where Apple can expand and gain new customers as opposed to simply growing its current iPhone and Mac user base. That growth will have a positive impact on the company's bottom line, and Ms. Huberty took that as a reason to raise her 12-month target price for the company's stock.

Ms. Humerty raised her target price for Apple's stock from $133 to $160, and she said that number could hit $190 if everything works out in the company's favor. Apple is currently trading at $129.64, up 1.18 ( 0.92%).

[Thanks to Fortune for the heads up]