Morgan Stanley predicts that Apple’s user growth will be driven by India, comprising 20% of the total.

Morgan Stanley analysts stated in a recent note that India is poised to be a significant driver of Apple’s five-year revenue and installed base growth. They attributed this to Apple’s manufacturing investment in India and the country’s thriving economy.

The note also resulted in an increased price target for Apple in India, raising it from $190 to $220, with a higher bull-case valuation of $270. Morgan Stanley reaffirmed their Top Pick status for Apple.

Morgan Stanley analysts predict that India could contribute 15% of Apple’s revenue growth in the next five years, compared to 2% in the past five years and $6 billion today. Additionally, they estimate India to account for 20% of the company’s installed base growth.

This projected revenue growth, expected to reach $40 billion in the next 10 years, is comparable to Apple introducing an entirely new product category.

The analysts provide reasons for their assessment, including India’s improved infrastructure and Apple’s commitment to manufacturing and retail operations in the country. A survey commissioned by Morgan Stanley also suggests an increasing desire and ability among Indian consumers to purchase iPhones.

However, the analysts caution that if India fails to meet its economic and demographic growth targets, Apple may not benefit as significantly. Despite this risk, Morgan Stanley remains bullish, stating that India will be as crucial to Apple’s growth as China has been over the past five years.