Topeka Capital Markets analyst Brian White pulled back a bit when he finally trimmed his $1,111 price target on Apple shares this past January, but his current $888 target is still among the highest on the Street. White is obviously thoroughly impressed with Apple’s (AAPL) current lineup and the new products currently in its pipeline — he sees an iPhone 5S coming in multiple colors this summer, as well as an “iTV” and an “iWatch” later this year — but he got the feeling during his current trip to the Far East that it’s time for Apple to embrace the current trend toward larger smartphones. To combat these monstrous Android handsets, White believes Apple needs to launch an “iPhad.”
“During our discussion with China Unicom, the growing importance of 5-inch to 5.5-inch smartphone displays in China (including Hong Kong) was stressed (hence the 5-inch screen in the ‘4521’ initiative) and clearly an area that we believe Apple will need to address in the future,” White wrote in a research note on Thursday. “We noticed this trend nearly a year ago in China (and Hong Kong) and it has gained momentum. In our view, we believe Apple will need to eventually launch a new product category that addresses the 5.5-inch ‘phablet’ category and for now we are coining this new device the ‘iPhad.’ ”
Awful name aside, White says a new Apple handset with a screen between 5 and 5.5 inches would offer the best of both worlds, merging key selling points from both the iPhone and iPad lines. Despite several rumors that suggest a larger iPhone is in the works, the analyst notes that he is not currently aware of any plans Apple might have to launch a phablet-sized iPhone.
White reiterated his Buy rating on Apple shares with an $888 12-month price target.