While some feelthat Apple  might be too reliant on the iPhone, Cowen said the outlook for Apple's signature product warrants a price target increase to $155 from $135, according to a note released on Monday morning. The firm maintained its outperform rating on the stock, which rose 0.8% to $141.16 on Monday morning, and is already up over 20% year to date.

"Field work for both near-term iPhone 7/7+ supply and early read on iPhone new model builds support our long-held view that Street [estimates] remain WAY TOO LOW for [the second half of 2017 and 2018] as an aging base (especially in China) forms a powder keg for this launch," Cowen analyst Timothy Arcuri wrote. 

The 10th anniversary edition of the iPhone is expected to launch this fall and should see a design overhaul, including OLED display, a Touch ID home button integrated into the display and a bottom section reserved for virtual buttons for functional and aesthetic purposes, Arcuri said. Other possible updates include a fingerprint sensor, facial recognition and wireless charging. He estimates shipments in the range of 55 million to 60 million for this new 5.8" iPhone with edge-to-edge OLED display. 

In addition, he thinks the iPhone 8 launch will be accompanied by an updated 4.7" iPhone 7 model, which should see shipments between 35 million and 40 million units, and an updated 5.5" iPhone 7+ model, which should see shipments in the range between 20 million and 25 million. Arcuri noted that "adding in a typical 'tail' for 7/7+, Street numbers still look WAY TOO LOW -- a contention we have maintained for several Qs now."

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The firm raised its fiscal 2017 full year revenue and earnings per share estimates to $235.5 billion and $9.35 per share, respectively, from $235 billion and $9.32.

Arcuri said that Apple is currently working on how to implement its AuthenTec Touch ID technology, which lets users unlock their phones and make purchases with fingerprint ID, into the edge-to-edge bezel-free design of the new iPhone. While the tech giant wants to use AuthenTec, which it acquired in 2012, it's "open to other options," Arcuri claimed. The iPhone 8 should be the only model with facial and gesture recognition, Arcuri said, although both the iPhone 8 and new iPhone 7+ should have two cameras with an updated layout. 

According to Arcuri, Broadcom (AVGO) - Get Report will most likely be the integrated circuits supplier for the potential wireless charging feature of the iPhone 8 and the two updated iPhone 7/7+ models. Dual-sourced baseband modems for the models should still come from Intel (INTC) - Get Report and Qualcomm (QCOM) - Get Report . In addition, the adoption of Power Delivery chip solutions from Cypress Semiconductor (CY) - Get Report should guarantee product safety and stable data transmission during faster charge, he noted. 

Besides strong iPhone 8 sales expectations and an aging installed base, other potential positives for Apple include the ramp of the Apple Watch, share buybacks, OLED display providing new design opportunities, stronger-than-expected tablet demand and new revenue stream from services, Arcuri said. 

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