Apple Inc's (NASDAQ:AAPL) new iPhone 5S and iPhone 5C sold 9 million units during its first opening sale weekend to the surprise of many market analysts who expected sales of the latest iPhones to be within the 5 to 6 million range.

According to SIG analysts Liz Pate and Chris Caso, Apple did not let its margins decline to achieve its box-office opening weekend. Both analysts said Apple stocks is looking to gain momentum well ahead of the company's iPhone 6 cycle along with the high demand for the iPhone 5S. They said the risk of Apple Inc's shares' decline was neglible.

Apple Inc shares may go down again if the demand for the latest iPhones goes down sometime after the launch. Analysts are willing to take this risk since the company's sales performance indicated a strong market response well ahead of 2014's iPhone 6 cycle.

Analysts said they will be expecting an improved production cycle when the iPhone 6 will be released in 2014 based on the assumption that the iPhone 6 will have better features than the current versions. According to the rumours in circulation, the iPhone 6 will have a larger screen size which can attract iOS users to upgrade. Apple has reportedly asked its supply partners to begin production of the iPhone 6 in the previous quarter. This means the iPhone 6 may be released earlier in June or July 2014.

Wall Street is expecting a revenue growth of 9 per cent for Apple Inc in 2014. Based on company figures, Apple has sold 228 million iPhones between 2011 and 2012.

Morgan Stanley raises EPS estimates

Meanwhile, Morgan Stanley chooses to remain bullish on Apple Inc (NASDAQ:AAPL) as it increased its earnings per share (EPS) estimates based on iPhone 5C pricing.

Apple's iPhone 5C is the source of several analysts' indecision because of its price. Many thought that the iPhone 5C was the cheaper version of the iPhone to be targeted to users in emerging markets. As it happens, Morgan Stanley analysts have raised their 2014 EPS estimates for Apple Inc based on iPhone 5C margins and better pricing.

Morgan Stanley analysts raised their 2014 EPS estimate to $44 per share or an increase of $2.47 per share. They also increased 2013's fourth quarter EPS estimate to $8 per share from the previous $7.51 per share. The analysts believe that the 9 million unit sales from the iPhone launch weekend of Apple Inc reflect high demand. They also noted that despite criticism, the iOS 7 has a high adoption rate with two-thirds of Apple's iPhones already with iOS 7 just 5 days after Apple rolled out the software. In 2013, iOS 6 had a 45 per cent adoption rate within the same number of days.

Morgan Stanley maintained Apple Inc's Overweight rating with a $540 per share price target. Other analysts also believe that Apple stocks may soon reach $600 per share if Apple can keep its momentum.

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