Financial services firm Morgan Stanley (NYSE: MS) raised its price target on Apple (NASDAQ: AAPL) shares to $210 from $185, saying it expects the company's iPhone unit sales to double in 2009 at the new $199 price point.

"We believe the market generally expects a doubling of iPhone units with the lower price point ($199) and we believe this is realistic, if not conservative," the investment bank said in a note.

Morgan Stanley expects 27 million iPhones to be sold in calendar year 2009 with an average revenue of $550 per unit.

The investment bank said Apple's operating leverage remains understated, and the mass market price and distribution of the new 3G iPhone will be a key driver of higher margin software and service revenues over time.

Apple CEO Steve Jobs announced its new iPhone model on June 9 at the Worldwide Developer Conference in San Francisco.

The new iPhone 3G includes built-in support for Microsoft's Exchange server.

Shares of Apple closed at $181.43 Tuesday on NASDAQ.

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