Wedbush expects iPad, Apple Watch event to be drumroll for 'iPhone 12'

Investment bank Wedbush says Apple's "Time Flies" event, focused on a new "Apple Watch Series 6" and "iPad Air 4," will help build anticipation for the "iPhone 12" keynote early in October.

In a note to investors seen by AppleInsider, Wedbush analyst Daniel Ives corroborates that the "Time Flies" event on Tuesday will be focused on refreshes of both Apple's iPad and Apple Watch products.

Apple is largely expected to debut the "Apple Watch Series 6" and "iPad Air 4" at the event, and may also debut an 8th-generation iPad and lower-priced Apple Watch with new plastic casing options.

The "iPad Air 4" will bring a number of iPad Pro features to the Air lineup, with slimmer bezels, USB-C and an A14X chipset on the docket. The primary feature of the "Apple Watch Series 6" is expected to be blood oxygen sensing and longer battery life.

Ives said that both Apple's wearable and tablet lineups are seeing a "renaissance of growth given consumer pent up demand and monetization tailwinds heading in FY21."

Looking ahead, the analyst predicts Apple will hold another special event early in October — likely within the first week. It's there that Wedbush expects the company to debut the "iPhone 12" and "iPhone 12 Pro" devices.

For the flagship product, Ives reiterates his forecast that the lineup will be a "one in a decade" product cycle, with an expected 75 million to 80 million shipments. China remains critical for the product cycle, and Wedbush is also tracking a spike in demand in India.

"Importantly, with our estimation that 350 million of 950million iPhones worldwide are currently in the window of an upgrade opportunity, we believe this will translate into an unprecedented upgrade cycle for [Tim] Cook & Co," the analyst wrote.

The analyst is maintaining his 12-month AAPL price target of $150, based on a a sum-of-the-parts valuation of a 15x multiple on Services at $900 billion and a 7.3x multiple on Apple hardware at $1.7 trillion. A bull case, set at a $175 price target, sees the same multiples applied to services at $1.1 trillion and hardware at $2 trillion.

AAPL shares are hovering around $117.98, up 2.29% in intra-day trading on Tuesday morning ahead of the "Time Flies" event.