According to Morgan Stanley analyst Katy Huberty, Apple could move 66 million 5-inch iPhones in the U.S. next year versus just 51 million if the lineup stayed the same. The numbers were revealed in a Wednesday morning note to investors, a copy of which was provided to AppleInsider.
Huberty's findings come after a survey of smartphone buyers suggested that nearly half -- 47 percent -- would choose an iPhone over other smartphones if it came in a larger size. Apple would siphon off a significant numbers of buyers from rival Samsung with such a device, the survey said, suggesting that larger displays are a key facet of the Galaxy line's appeal.
A new, jumbo-sized iPhone might also affect Apple's carrier partners, providing an incentive for existing users to upgrade and take advantage of promotions designed to attract those who wish to switch wireless providers. This would most negatively affect ailing Sprint, Huberty believes, while boosting resurgent T-Mobile.
Huberty also believes that as many as 8 out of 10 iPhones sold in 2015 will be to existing iPhone owners, due in part to the exceptionally strong brand loyalty exhibited by that group. According to the survey, 90 percent of those who currently own an iPhone intend to remain loyal to the brand.
"Current iPhone owners value the software, brand, ability to synchronize to other Apple devices, and the App Store's quality and size more than the average user, which drives Apple's high loyalty rating," the report reads. "The top criteria across all brands are longer battery life, software / operating system, and lower price, though current Apple users think price is of lesser importance."
Overall, Huberty is bullish on the iPhone's future, leading Morgan Stanley to raise its price target on Apple shares from $630 to $690. That position assumes that the company increases its gross margin to 39 percent and trades at 15 times price-to-earnings.