Our 'Vision' for Apple: Higher Price Target, Panic Point

* We are boosting our Apple price target and lifting our panic point.

* We see improved prospects for the smartphone market and faster 5G device growth in 2024.

* Reports suggest Apple will introduce its Vision Pro mixed reality headset in November.

Yesterday we discussed a near-term challenge for Apple (AAPL) , with its Apple Watch business, and so far the U.S. Trade Representative has yet to render a verdict. But the outlook for the company's all-important iPhone business got a boost from Micron's (MU) outlook that, as we discussed earlier today, calls for improving smartphone volumes in 2024. That bolsters the recent 2024 forecast provided by research firm Canalys, which sees 2024 smartphone shipments rising 4% year over year after falling 3% this year. IDC agrees with that outlook in its forecast that calls for a 3.8% increase in 2024, with 5G smartphones growing at a much quicker 20% year over year. That rebound in the overall market is a positive for iPhone. But because Apple's smartphone lineup is all 5G, the substantially faster pace for that class of devices bodes extremely well for Apple. That outlook is leading us to bump up our AAPL price target to $205 from $195. As we make that move, we will also lift our panic point on AAPL shares to $165 from $160.

We expect to hear much more about the smartphone and 5G market during the upcoming 2024 International trade show. We will be following announcements and keynotes from the event, sharing with you what they mean for our shares of Qualcomm (QCOM) , Marvell (MRVL) , and Applied Materials (AMAT) .

Typically, Apple doesn't attend let alone make announcements during the annual CES event. And with reports Apple will be readying its Vision Pro mixed reality headset for a February debut, we doubt it will make an exception. Not only is this Apple's first new product launch since 2015, but it looks to be a far more complicated product launch than those for other Apple devices. The mixed reality headset will feature customized components that must be correctly assembled and packaged at the point of sale, in part to ensure a proper device fit.

This suggests a very high touch sales experience compared to buying an iPhone, iPad, or Apple Watch. Apple said it will be enhancing its retail stores to accommodate the Vision Pro and its accessories, and when Action Alerts PLUS' Chris Versace stopped by the World Trade Center Apple Store yesterday, he learned Apple will be training select store employees in how to use, demonstrate, and fit the Vision Pro.

Apple's mixed reality headset, however, has a price point that starts at $3,499, which suggests it won't be a high-volume product out of the gate. We also have our questions about the headset being too clunky given its external battery pack, but we'll reserve judgment until we see the device in action. Much like the Apple Watch that really took off when its third iteration embedded cellular connectivity, we suspect the second or third Vision Pro model will be the one that takes off, especially if the price point comes down.

AAPL, QCOM, MRVL, AMAT are holdings in the Action Alerts PLUS.