Katy Huberty of chief Apple analyst for Morgan Stanley last week paid a visit to Apple to speak with three top executives. The meeting between Huberty and Apple executives Peter Oppenheimer, Ron Johnson and Eddy Cue reportedly contained no company secrets but did leave Huberty with "increased confidence.
The Morgan Stanley analyst reportedly pressed Apple on rumours of a later than normal iPhone launch but got no answer with the executives only talking about expanding iPhone penetration, building larger retail stores and increasing the number opened every year. Apple also said that it follows product cycles driven more by software than hardware.
Huberty now has a $540 price target on AAPL based on the following factors:
- LTE iPhone upgrade cycle and lower priced 3G iPhone in 2012
- Larger tablet market and continued Apple market dominance longer-term
- Expanding distribution in China
- Potential for Apple to enter the Smart TV market in 2012-13.
Huberty also bases her $540 target as a best case scenario in which iPhone sales grow 55% per year over the next two years, iPad sales grow 74% and Mac sales grow 17%.