“BMO Capital Markets’ Tim Long takes a fresh look at Apple on Monday through a new ‘one stock, one theme’ series, focusing on Apple’s iPhone installed base,” Teresa Rivas reports for Barron’s.

We estimate total iPhone installed base hit 715 million, including 228 million of second-hand devices, in December 2016, with year-on-year growth of 20%. We model year-end installed base to grow 13% in CY17 and 9% in CY18. We estimate, by the end of 2018, there will be 300 million second-hand iPhones in use.

We are refreshing our highly granular iPhone installed base model. We estimate 31% of the new phone installed base will be 2 years or older at the time of the September 2017 launch event. Although refreshment cycles are lengthening to 2.5+ years, which means not everyone will take advantage, the availability of un-upgraded phones will serve as a tailwind as Apple launches the new models. — BMO Capital Markets analyst Tim Long

“Long writes that while the target of doubling service revenue is ambitious, it’s still achievable,” Rivas reports. “Long has an Outperform rating and $160 price target on Apple.”

Read more in the full article here.

MacDailyNews Take: Apple’s Services business is actually much larger than most people think since Apple only quotes the one-third the company takes of total purchases. Doubling it in 4 years seems eminently doable.

SEE ALSO:
Citi ups Apple price target to $160 on impending iPhone supercycle – March 6, 2017