Morgan Stanley, Uber-Optimism, And iPhones

So Morgan Stanley recently raised expectations on Apple share prices based on the most optimistic iPhone forecast I think I’ve ever seen.

The investment bank believes that Apple will sell 27 million iPhones in the calendar year 2009, at an average price of $550 per unit. All this will raise Apple stock to $210 per share, the bank concludes.

Anyone else got a problem with this picture? Here are mine:

* The much-anticipated price reduction of $199 per 8-gigabyte phone. Even the 16-gig unit is $299. How Morgan Stanley estimates revenue of $550 per phone–even considering subsidies by AT&T–is a mystery.

* The 27 million units that Apple is expected to move. Sure, Nokia–the global handset leader–sold 14.5 million smart phones in the first quarter of this year, meaning anyone who dethrones the Scandinavians could sell something like 29 million units in a year (assuming the usurper has the same sales figures during all quarters involved) . But Apple reported selling 1.7 million units in Q12007 and 2.3 million units during the quarter prior. It would have to increase sales almost nine-fold to meet Morgan Stanley’s prediction. With certain issues still lingering over the iPhone, it doesn’t seem likely that Apple will toss Nokia off the mountain by next year.

* Investors elsewhere don’t seem to share Morgan Stanley’s optimism. Consider that when the cheaper, 3G iPhone debuted last week, shares fell 2.2 percent. Even today, Apple shares closed down 2.7 percent at $178.75.

What do you all think?