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"&amp;lt;vc&amp;gt;&amp;lt;strong&amp;gt;Apple's next update to the blockbuster iPhone handset is expected by one prominent analyst to have a lower total cost of ownership, and to also include new gesture-based functionality.&amp;lt;/strong&amp;gt;\r\n\r\nKaty Huberty with Morgan Stanley maintains that the biggest barrier to greater iPhone adoption is the cost of the hardware, followed by the service plan. The investment in the device has been its biggest issue in both developed markets like the U.S. and emerging ones like China.\r\n\r\nBut Huberty expects Apple to address that in June, by introducing a new model that will be economically friendly to even more consumers.\r\n\r\n\"We expect Apple to launch new iPhones in June that offer both a lower total cost of ownership and new functionality, potentially including gesture-based technology,\" she wrote in a new note to investors Friday.\r\n\r\nIn 2009, when Apple introduced the new iPhone 3GS, the company also dropped the price of the previous year's iPhone 3G &amp;lt;a href=\"http://www.appleinsider.com/articles/09/06/08/apple_debuts_speedier_iphone_3g_s_with_built_in_video_camera.html\"&amp;gt;to $99&amp;lt;/a&amp;gt;. However, despite the lower price point, the high end iPhone 3GS was still the &amp;lt;a href=\"http://www.appleinsider.com/articles/09/10/19/iphone_ipod_touch_experience_tremendous_growth.html\"&amp;gt;most popular option&amp;lt;/a&amp;gt; for consumers.\r\n\r\n&amp;lt;div align=\"center\"&amp;gt;&amp;lt;img src=\"http://images.appleinsider.com/morganstanley-100226.png\" border=\"1\" width=\"614\" height=\"456\" alt=\"Morgan Stanley\" /&amp;gt;&amp;lt;/div&amp;gt;\r\n\r\nIn addition to lower cost of ownership for the iPhone, Huberty remains bullish on AAPL stock because of the forthcoming iPad launch in March. Here she is particularly optimistic, projecting shipments of 6 million devices in the 2010 calendar year, versus &amp;lt;a href=\"http://www.appleinsider.com/articles/10/01/28/wall_street_expects_apples_risky_ipad_to_sell_1m_5m_in_first_year.html\"&amp;gt;Wall Street's average projections&amp;lt;/a&amp;gt; of 3 million to 4 million.\r\n\r\n\"We expect Apple to ship its first iPad and announce additional content deals in late March to better than expected demand,\" Huberty wrote. \"We see the iPad targeting the sub-$800 consumer notebook market which equates to 30M annual units just in the US (120M globally.\"\r\n\r\nMorgan Stanley has maintained its \"overweight\" rating for AAPL stock, with a price target of $250.\r\n\r\nIn the past, Huberty was &amp;lt;a href=\"http://www.appleinsider.com/articles/08/12/10/iphone_seen_as_still_too_expensive_losing_steam_in_fall.html\"&amp;gt;notoriously negative&amp;lt;/a&amp;gt; on AAPL stock, suggesting the iPhone was too expensive even at a $199 price point. In late 2008, she predicted that iPhone sales would suffer because Apple had priced the product too high.\r\n\r\nBut last year, Huberty &amp;lt;a href=\"http://www.appleinsider.com/articles/09/05/26/apple_upgraded_by_morgan_stanley_on_expected_iphone_boom.html\"&amp;gt;turned positive&amp;lt;/a&amp;gt; on Apple, stating that the company had become the \"clear leader in the battle over the mobile Internet.\""^^<http://www.w3.org/2001/XMLSchema#string>
<http://appleinsider.com/articles/10/02/26/apple_predicted_to_introduce_lower_cost_iphone_models_in_june>