Apple is scheduled to release its fourth fiscal quarter earnings report on Oct. 27, and analysts generally seem to think the company is enjoying robust growth in the smartphone market. Multiple surveys have indicated that the iPhone continued to pick up steam during the September quarter even though the iPhone 6S and iPhone 6S Plus did not become available until a few days before the end of the quarter.

Smartphone market grows despite saturation

Morgan Stanley analyst Katy Huberty and her team said this week that they’re seeing signs that the smartphone market remains “surprisingly robust” even though the market is quite mature. She reports that the average lifecycle of smartphones in the U.S. has contracted by more than five months, which drives greater demand.

Also she said China continues to grow as a percentage of the market and that replacement cycles there are “structurally shorter.” She expects average selling prices to rise as well, especially in China as most consumers have indicated plans to spend more on their next smartphone.

The Morgan Stanley team also reported that overall demand for smartphones is up 32% in the U.S. and 8% in China, which supports their expectations of a 10% unit growth rate year over year next year, which would only be a slight decline from this year’s expected growth rate of 12%.

Apple posting record share gains?

The Morgan Stanley team also reports that their surveys suggest that Apple is seeing record share gains. As a result, Huberty raised their price target for the company from $155 to $162 per share. She’s expecting to see iPhone unit growth of 7% in fiscal 2016, compared to her previous estimate of 3%. Her bull case suggests growth of up to 12% “if purchase intentions fully convert.

US Apple Demand

She states that stronger iPhone growth is the result of a strong upgrade cycle as 60% of survey participants said they intend to upgrade in the next year compared to 47% last year.

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Also she found signs that Apple could see record share gains in both the U.S. and China as consumers are preferring brand and software over price.

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She also found that the net impact of smartphone mix suggest “flattish” average selling price, which would be better than the 3% decline they had been modeling in fiscal 2016. Morgan Stanley’s survey suggests that in China, Samsung is at a disadvantage, while in the U.S. and China, LG is at a disadvantage. The survey also indicates that HTC is losing scale.

Apple shares closed down 0.48% at $111.58 per share today.

Graphs in this article are courtesy Morgan Stanley.