The iPhone 5 and new iPads will trigger a surge in sales for Apple this quarter and next, says Morgan Stanley's Katy Huberty.
In an investors note out today, Huberty pointed out that key suppliers for both devices say their own revenue will be higher than anticipated for the current quarter. They're also seeing above-average orders from Apple for next year's first quarter. And demand could rise even higher before the year is over.
The analyst believes the iPhone 5 will drive more customers to upgrade this quarter and on into next year. At the same time, the iPad Mini and 4th-generation iPad will accelerate the growth of total iPad shipments.
Wall Street expects shipments of 46 million iPhones and 23 million iPads this quarter, followed by 43 million iPhones and 19 million iPads next quarter. But Huberty thinks the numbers will be even higher.
Component prices for Apple are likely to drop, which will help boost the company's profit margins.
China will also pay a key role in demand for the iPhone and iPad, according to the analyst. Distributors believe the iPhone 5 and the iPad Mini will do well in China, pointing to the lower cost of the Mini relative to its big brother.
The Chinese government is expected to issue LTE licenses in the second half of 2013. At the same time, Apple may finally be able to snag a distribution deal with China Mobile to carry the iPhone. Apple already has distribution agreements with China Unicom and China Telecom, the country's other two top carriers.
Over the longer haul, Apple will expand its retail stores and carrier distribution not only in China, but in Brazil and other emerging markets, Huberty said.
And to top it off, the analyst expects the company to launch its much-anticipated Apple Smart TV sometime next year or in 2014.