BMO sees Apple selling 189M iPhones & 12M Watches in fiscal 2015, raises target to $110

Analyst Keith Bachman has maintained his "outperform" rating for shares of AAPL, and in a research note issued this week provided to AppleInsider, he also increased his projected iPhone sales to 189 million units in fiscal 2015. For the upcoming holiday quarter, he believes Apple will sell 58 million iPhones, but cautioned that number could be conservative if the iPhone 6 launches in China sooner rather than later.

Bachman's forecast calls for the average selling price of the iPhone to increase to $637. His estimates peg the 4.7-inch iPhone 6 accounting for 70 to 75 percent of total sales of the latest generation of models, while he believes the 5.5-inch iPhone 6 Plus will take 25 to 30 percent of units in fiscal 2015.

As for the forthcoming Apple Pay mobile payment service tied to the iPhone 6 and Apple Watch, Bachman doesn't expect this to have a significant effect on the company's bottom line as it looks to establish its service. Through fiscal 2016, he sees Apple Pay helping to drive iPhone sales, but not adding "meaningful incremental revenues" for the Cupertino, Calif., based company.

Bachman also predicts that the company will sell 12 million of the Apple Watch in fiscal 2015, which runs through the end of September. For calendar 2015, he sees the company selling 20 million units.

Finally, Bachman has reduced his iPad estimates by 9.5 million units for fiscal 2015, to 58 million. He believes Apple's new, bigger iPhones will cannibalize some iPad sales — and in his eyes, that's a good thing for Apple's bottom line.

"If Apple sells one iPhone and does not sell one iPad mini, Apple increases gross profit by about $200, all else equal," he said.