JPMorgan Analyst: Our Only Concern Is Whether Apple Can Make Enough Watches

JPMorgan Chase & Co. JPM analyst Rod Hall raised his price target on Apple Inc. AAPL to $145 a share from $140, which sent Apple shares soaring on Wednesday. Hall was recently on CNBC to discuss why he is so bullish on the Apple Watch.

Is There Anything At All You Are Concerned About Apple?

“The thing I am most worried about…is whether they can make enough watches or not, that’s the main problem I think they have got,” Hall said.

Why Do You Think Apple Watch Will Be A Success When The Wearabales Industry Is Still Nascent?

“The thing you can think about those is smartphones, we had a lot of examples of smartphones that came out early on, Nokia in ’95, other kind of devices, they didn’t sell that many units but then all of the sudden the iPhone really hit the sweet spot with consumers and took off,” Hall replied.

“So we believe that could happen again here with the Apple Watch, you come out with a good product that re-establishes or establishes a new category, it can really take off [in unit] volume terms.”

How Do You Conclude That 5p Of People Who Have iPhone 5 or Newer Versions Will Buy The Apple Watch?

“We build a pretty detailed base of iPhone users,” Hall said. “I think a lot of people will be surprised to know that there are 400 million people with an iPhone 5 and over about 580 million people that have an iPhone.”

“So, there is a huge user base out there, we think a 5p penetration level by the end of this year is pretty conservative. You think about the kinds of people and the kind of value that something like an Apple watch will bring to those people, we don’t think this is an overly optimistic number.”