India to fuel Apple's growth with 20% share by 2028, says Morgan Stanley

According to Morgan Stanley analysts, India will likely be a significant driver of Apple's five-year revenue and installed base growth, noting Apple's investment in manufacturing in India and the country's "economic boom."

The note also indicated a rise in the India-driven price objective from US$190 to US$220, with a bull-case value of US$270. Morgan Stanley has also stated that Apple is their top pick.

Analysts at Morgan Stanley predict that over the next five years, China will contribute 15% of Apple's revenue growth — up from 2% in the previous five years and US$6 billion currently — and 20% of the company's installed base growth.

Morgan Stanley estimates that a sales increase of US$40 billion over the next ten years would be "equivalent to Apple ramping up an entirely new product category."

The analysts base their conclusion on various reasons, including India's increased electrification and Apple's apparent attempts to establish a manufacturing and retail presence nationwide. According to a Morgan Stanley poll, Indian consumers have a greater desire and capacity to acquire iPhones.

Analysts did add a caution, though, warning that if India fails to fulfill its economic and demographic development targets, "we wouldn't expect Apple to be as significant of a beneficiary in India."

However, Morgan Stanley's core view is positive. "Overall, this means that India will be just as important to Apple's growth algorithm over the next 5+ years as China was in the previous 5 years, which we believe the market undervalues today," the analysts said.