Morgan Stanley predicts Apple shares surge, Apple ‘iPhone’ in 2006

“Shares of Apple Computer Inc. may surge 25 percent in the next year on new products and iPod sales growth, Morgan Stanley’s Rebecca Runkle said Thursday, a day after two rival analysts said the stock is overvalued,” Edgar Ortega and John Melloy report for Bloomberg News. “‘We believe market share and new product opportunities accelerate even more than we expected in 2006,’ Runkle wrote in a note to clients. She cited her recent visit to Apple headquarters in Cupertino, Calif., and a consumer survey.”

“More people plan to buy an iPod or an accessory this holiday than a cell phone, according to a survey of 2,500 people by Morgan Stanley. People who own iPods are three times more likely to buy Apple’s Macintosh computers, the survey showed,” Ortega and John Melloy report. “Sales of iMac and iBook computers may grow more than 43 percent in 2006 and 2007, helped in part by a shift to Intel Corp. computers chips, according to Runkle. Even though iPod has more than 70 percent of the music player market, its sales will expand because just 8 percent of U.S. households own them, Runkle wrote. She also sees expansion of Apple retail stores.”

Ortega and John Melloy report, “Apple will unveil new products at its Macworld Expo on Jan. 8. The company in the next 12 months will likely start selling a cell phone in order to fend off competition from telephone equipment makers that are adding digital music players, according to Runkle. An iPhone could generate $1.2 billion in sales and add 9 cents a share to 2006 in earnings, she wrote.”

Full article here.
Clarification: Macworld Expo 2006 runs Jan 9-13. Apple’s CEO Steve Jobs’ keynote presentation, during which new products are traditionally unveiied, is scheduled for Tuesday, January 10, 2006 at 9am PST.

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Related articles:
Moragn Stanley raises target price on Apple Computer shares to $90 – December 16, 2005
Morgan Stanley predicts Apple shares surge, Apple ‘iPhone’ in 2006 – December 16, 2005
BofA cuts Apple rating to ‘neutral’ from ‘buy’ based on valuation, Apple shares drop over 4-percent – December 14, 2005
Bear Stearns downgrades AAPL based on valuation – December 14, 2005
It’s official: Apple CEO Steve Jobs to deliver Macworld San Francisco 2006 keynote address – December 01, 2005


  1. The way I see it, people who own iPods are 3 times more likely to buy an Apple computer. Once Apple goes intel previous MS users will be 3 times more likely to buy an Apple. 3 + 3 = 6, and that means a ton of people will be buying Apple computers next year. Overly simple math, but you get the idea.

  2. No kidding…but to say it’ll go up 25% in 2006 after it’s gone up 5x that much in 2005 isn’t exactly leading edge analysis. Your family pet could even figure that one out.

  3. Nonsense–a 25% increase ON TOP OF the increases in recent years would be nothing to sneeze at. For example, a 25% increase in valuation would catapult Apple beyond Dell in total worth!
    It would also be more than double the historical average increase in the stock market (10-11%).

  4. ahh it seems like just yesterday we couldn’t get through an Apple article without hearing the word “beleagured”. Sweet joy.

    Ill take 25%. 25% for most companies is a stellar year. The 125% yearly rises in Apple will slow down if for no other reason that no campany can keep that type of growth. Even Apple has said that.

  5. I just love her name — Rebecca Runkle.

    Sounds like a bad character name from a bad Bruckheimer film.

    (Ooh, wait, the last three words of that last sentence were redundant.)

  6. I can fortune tell as well as Morgan Stanley and here is what I predict. AAPL has doubled in price from Jan 05 to Dec 05. That’s a really good run up and hard to maintain in the stock world. Also Apple still has a high PE ratio (currently 46.7). I think that January’s MacWorld will announce simple upgrades and maybe some good stuff but not the Intel Macs as everyone is predicting. Apple is still on line to intro them maybe in May or June. But this will disappoint all the stock nuts who are actually believing some of the recent rumors. I figure AAPL to hold to about $75 until the end of the year, then after MacWorld all the profit takers and head cases will drive the price down to about $60 where it will start another rise and maybe hit $80 by the end of the year. That would still be an excellent two years. But I do not forcast the detailed ups and downs during 2006. There are always some up and down. Either way, always buy and sell stock with no emotional attachment. The price of a company’s stock does not reflect the company as much as it reflects peoples impressions of that company.

  7. shipwithsails:

    > I think that January’s MacWorld will announce simple upgrades and maybe some good stuff but not the Intel Macs as everyone is predicting

    That seems highly unlikely. With the announcement of the URGE service by MS/MTV, NBC letting it slip that they plan to offer more content on iTMS, rumors of a DVR-enabled Mac mini… there’s too much going on and too much of a buzz about digital media right now for Apple/Jobs to come out with a lame, lackluster keynote and product intro. And if anybody knows how to keep fanning the fire, it’s Steve Jobs.

    I expect nothing less than to have my mind already blown by the time the “One More Thing…” part of the keynote rolls around… ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    mw: truth, as in “I’ll take Apple’s version of the truth over MS’s, any time!”

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