India is emerging as a major growth driver for iPhone maker Apple, Morgan Stanley said Monday. The investment bank raised its price target on Apple stock based on the company's prospects in the world's most populous country.
"We are bullish on India as an emerging growth driver for Apple, and forecast the country accounting for 15% of Apple's revenue growth and 20% of installed base growth over the next 5 years," Morgan Stanley analyst Erik Woodring said in a note to clients.
India represents $6 billion in annual revenue today for Apple, but could reach $40 billion in the next decade, he said.
"Recent investments in brand awareness, local manufacturing, and affordability programs, combined with India's economic boom and growing digitization, set the stage for India to become Apple's next growth frontier," Woodring said.
Apple Stock On Tech Leaders List
He estimates that India will be the source of more than 170 million new Apple product users in the next decade. In fact, India could account for about 10% of Apple users by 2032, he said.
Woodring reiterated his overweight, or buy, rating on Apple stock and raised his price target to 220 from 190. In addition, he rates Apple stock as a "top pick."
On the stock market today, Apple stock climbed 1.7% to close at 193.99. Apple stock notched an all-time high of 194.48 on June 30.
India is likely to be as important to Apple's growth prospects in the next five-plus years as China was in the last five years, Woodring said. India overtook China as the world's most populous country in April, according to the United Nations.
Apple opened its first retail stores in India in April.
Further, Apple stock is on the IBD Tech Leaders list.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
