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iPhone 6 will ride pent-up demand into 2016 -- analyst

Only around half of the 250 million iPhone 4S units and older models may be upgraded in the near term, leaving plenty of room for fiscal 2015 and 2016, says Morgan Stanley analyst Katy Huberty.

Apple's new iPhone 6 handsets. CNET

The iPhone 6 is likely to score additional torrents of customers upgrading, but quite yet.

In an investors note released Tuesday, analyst Katy Huberty pointed to estimates that say only half of the 250 million owners of the iPhone 4S and older iPhones will upgrade to the iPhone 6 this year. As such, that leaves a lot of potential demand for the future, specifically for Apple's fiscal 2016 year, which starts in October 2015. Further, if Apple Pay or Apple Watch prove popular, Huberty expects to see even further iPhone upgrades throughout fiscal 2015 and 2016.

On Monday, Apple reported a mostly hot September quarter with iPhone unit sales of 39.3 million, up 16 percent from the year-ago period. Mac sales hit 5.5 million units, up 21 percent from a year ago. Only the iPad failed to hit a home run, with sales slumping 13 percent to 12.3 million units.

Consumers seeking an iPhone 6, however, may have to wait a while. Apple CEO Tim Cook said that demand for the iPhone 6 and iPhone 6 Plus "is far outstripping supply," a factor that could play out through the end of 2014 and beyond.

"It's unclear, looking at the data, when supply will catch up with demand," Cook said on a conference call. "It's clear, as of today ... we're not even close. We're not even on the same planet."

In premarket trading early Tuesday, Apple shares are hovering around $102, up around 2.8 percent from Monday's close.

Retail checks by Huberty suggest that Apple has addressed some of its early supply constraints. But the iPhone's reach will be expanding from its current 32 countries to more than 115 by the end of December. That means some consumers who wish to buy or upgrade to the iPhone 6 over the coming months may be out of luck.

However, the analyst believes Apple will be able to build up its iPhone 6 inventory by March 2015, which could then trigger more upgrades and start to generate more iPhone sales than is typical for that time of year.

Huberty also weighed in on other factors, notably whether Apple can continue to grow sales and earnings.

"Yes, in our view, at a single-digit pace long term," Huberty said. "Apple has the opportunity to take share in slower growth smartphone and tablet markets with larger screens and new services. New product categories like Watch, and services like Apple Pay could further boost growth."

And can the company boost its efforts at innovation as it has in the past?

"Yes, we see Watch as an important barometer of the company's innovation capabilities under the leadership of Tim Cook," Huberty said. "We are also encouraged by recent additions to Apple's management team, which expand leadership in key areas like retail, design, health and digital content."

Reviewing the robust September quarter results, JP Morgan analyst Rod Hall said that Apple "continues to execute well in what we believe is a tougher global economy." In an investors note released Tuesday, the analyst said he does see some risk in the current quarter based on Apple's ability to boost iPhone production and believes the company is eyeing greater demand than supply for the iPhone through the end of the 2014.

For the December quarter, Hall forecasts iPhone unit sales of around 65 million, a 27 percent increase from the year-ago quarter. But he believes those numbers could be much higher if Apple is able to catch up with the heavy demand sooner than expected.

"Given very strong iPhone 6/6+ demand and Tim Cook's commentary we would guess that Apple is assuming iPhone supply constraint for most of FQ1 (fiscal first quarter) in their current revenue guidance." Hall said. "Upside potential, therefore, likely rests mainly with the company's ability to ramp production faster through the quarter."

In his latest investors note released late Monday, Piper Jaffray analyst Gene Munster also focused on the topic of iPhone supply and demand. Munster noted Apple's target of five to seven weeks of channel inventory for the iPhone and iPad. In short, the company wants to keep enough supply on hand over that period of time that's ready to deliver directly to buyers.

And just how many iPhones and iPads would that target produce? Based on Munster's sales estimates for the March quarter, the "new channel inventory target would seem to imply an additional 3-4 million iPhone units and 1-1.5 million iPad units to be recognized in the March-15 quarter."