Jay Yarow
A selfie
Piecyk is upping his target to $135 from $128 based mostly on the "selfie craze" and Apple's improved camera functions for the iPhone 6.
Sounds kind of silly, but it makes perfect sense. Apple upgraded the front-facing camera, and as a result photos taken with that camera are three times as large as they were in the past. The new iPhone can do slow-motion video, which produces large files.
The result of these large files is that people need more storage on their phone. This means they are going to pay the extra $100 to bump into the next storage tier. Or, in lieu of that, they may pay for iCloud storage.
Beyond the immediate fiscal bump, Piecyk speculates that the improved video camera will lead to people shooting and editing more video. The video editing will be done either on iOS devices, or on Macs. Either way, people are driven deeper in Apple's ecosystem, which keeps them locked in.
While much of the previous analysis is a bit squishy, Piecyk's price target increase is based on firm numbers.
He thinks Apple is going to sell 62.5 million iPhones in the holiday quarter, up from 60 million previously. If Apple hits Piecyk's number it would be a 22.5% year-over-year jump in sales. He's also upping his estimate for the price of an iPhone to $624, versus $609 previously. And he's increasing his estimate for the company's gross margin in fiscal 2015 to 38% up from from 37.8%.