We talked to the most bullish Apple analyst on Wall Street about the iPhone 8, AR and China (AAPL)

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Thousands of tech enthusiasts, developers, journalists, and other Apple fans are set to gather in California next month for one of the most anticipated tech events of the year.

Rumors are flying about what's expected from Apple this year, but whatever new iPhone 8 or upgraded Apple Watch is announced, Morgan Stanley analyst Katy Huberty will be watching with anticipation.

She says this year's event will be a "supercycle" and could blow previous product launches out of the water.

Business Insider spoke with Huberty about her 17 years covering the technology space, what she expects to hear from CEO Tim Cook next month, and how it could affect Apple's stock price.

Here's what she had to say about Apple and her $182 price target for the company's stock, which is the highest on Wall Street:

Graham Rapier: What's the most important thing for a new investor to know about Apple?

Katy Huberty: While some consumers and investors see Apple as a device company, it truly is a platform company. Apple is making an increasing percentage of its money off of services, and most of those aren't even Apple services, they're Google and Tencent and Netflix and Spotify. Apple as a stock can actually be a play on the success of all those mobile services.

Any application that sells in Apple's App Store, when you download a game for $0.99 or sign up for a subscription to a service like HBO or Netflix, Apple is taking a 30% cut of that.

Rapier: What are some macro trends that could affect Apple?

Huberty: From a macro standpoint, China is misunderstood by the market. If you look at Apple's results over the past year, China is a disappointing region. The investment-community dialogue around that is that Apple may be losing its edge to local Chinese-branded smartphone makers like Vivo or Lenovo. We absolutely do not think that's the case.

I'd point out a couple of things. If you look at Apple's China business, Macs are growing double digits, iPads are growing double digits, services are growing double digits, but iPhone is not growing. It’s highly unlikely that Chinese consumers are paying $2,000 for a Mac at home but carrying a cheaper smartphone device with them. More likely, the explanation is that Apple's retail system is alive and well. High-end Chinese users want to buy Apple products, but the iPhone has not had a form-factor change for three years. We believe that Chinese consumers are just waiting for that change and that pent-up demand will demand a significant acceleration of growth in Apple's 2018 fiscal year.

Year-old iPhones in China grew 56% this year, and yet iPhone sales are declining. That gives you a sense of how much pent-up demand there is on the back of this new iPhone launching in September.

The last point I'd make is that Wall Street looks at shipment data, and if you look at that data set, you'll see that local Chinese companies are taking share. We think that data is misleading. If a company ships products into a channel somewhere, even if that phone isn't purchased and activated, it still counts as a shipment. You've seen weakness at a number of semiconductor companies that sell into those cheaper brands. Their business has been very weak because there's inventory in the system. That means the shipment data is overstated.

The quality of those devices is not as good as an iPhone, and therefore they don't last as long. They tend to get upgraded every 18 months, whereas an iPhone tends to get upgraded every two to three years. What that means is you have to sell a lot more of them to have the same market share of the installed base. The shipment data is misleading.

Wall Street looks at that and says Apple is losing its edge. The reality is, there's pent-up demand as Chinese consumers who always want to be seen with the latest form factor and new technology are waiting for a big product refresh, which is coming next month.

Rapier: Who are some of Apple’s biggest competitors, both at home and abroad in places like China?

Huberty: By the numbers, Apple's biggest global competitor, by far, is Samsung. If you look domestically, it's really an Apple-Samsung market.

In China and other emerging markets, there's more diversity because there's higher price sensitivity and larger low-end markets. It feels like every year or two there's a new winner in China, a company that grows really fast, that doubles shipments, that takes share, and then a year or two later they start to decline and another one emerges. We haven't seen yet in China any significant staying power for those local brands. Of those four — Vivo, Opo, Xiaomi, and Huawei — Huawei has had the most staying power, but recently hasn't had as much growth as Vivo or Lenovo.

Rapier: What will Apple’s business look like in the next five to 10 years?

Huberty: The question I get most often from investors goes: "Apple has had great success with the iPhone, but iPhone is 70% of the business, so how do we gain confidence that they will be able to come in and disrupt another category that is as big of a markets as smartphones and really plug the gap when iPhone begins to decline?" That is an important question on investors minds, but the reality is in the medium term we think the iPhone is the next iPhone. What I mean by that is, there will be enough changes to the iPhone and new use cases that the current installed base will need to be upgraded arguably faster than in the past, and there will be a whole new wave of services that drive revenue.

Let me give an example. Apple in June launched ARKit. Apple will launch smartphones in September that have improved camera capability that allows for advanced augmented-reality experience. That ARKit allows all sorts of developers — retailers, gaming manufacturers, social-media companies — to take advantage of Apple's new hardware in this platform to write new applications. To the extent that those are successful, not only will Apple take its 30% cut of those services, but the existing iPhone base will need to upgrade to new hardware that has this new camera capability. So we think this will be another chapter for iPhone. This pushes out the need for Apple to enter a new category. iPhone can be that category.

Rapier: What should we expect to see at the launch event?

Huberty: We're calling this a supercycle. There will be so much more technology and a new look to the devices that consumers will upgrade faster than they have been, and that will accelerate growth. The market, sell-side consensus, is looking for around 13% iPhone unit growth in fiscal year 2018, we are modeling 23% growth. Again, the biggest differential between us and consensus is our previous China discussion, where Apple could see much faster growth than any other region.

Rapier: If you could ask management one question today, what would it be?

Huberty: The biggest question, beyond just the nuances of the quarter, is to get a better understanding of how Tim Cook sees ARKit and augmented reality as a category influencing the Apple model. Is that something that can really move the needle, accelerate upgrades, create new services and new revenue streams in the next six to 12 months? Or is it a technology that they are planting a flag today that has longer-term impact?

If the company and the reality plays out that this is a trend over the next 12 months, that's something that's definitely not priced into shares.

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