After surging from less than $100 in early 2009 to a recent $670, Apple (Nasdaq: AAPL) has now an equal number of supporters and detractors.  Analysts who follow Apple know that it continues to churn out segment-busting products, and they note shares hardly seem expensive at less than 10 times projected 2013 earnings per share (when its $117 billion in net cash is excluded from its $630 billion market value).

But others wonder how a company already worth more than $600 billion can keep finding new converts (i.e. new buyers to the stock) when lofty future expectations are already seemingly baked into the stock.

Scott Sutherland, who follows Apple for Los Angeles-based Wedbush Morgan, clearly favors the bull argument.  He’s just hiked his price target  to $885, which represents 32% upside from here. Best yet, he says the stock will make a sharp upward move sooner rather than later. 

So why does Sutherland say Apple is a timely play? It’s all about the product cycle.  And it kicks off next week on Wednesday, Sept. 12, when Apple is expected to unveil its fifth iPhone, as well as the next version of  the operating system software used by the iPhone and iPad, known as iOS 6. The new iPhone and iOS 6 software could be on store shelves as soon as Wednesday, Sept. 21, according to media reports.

#-ad_banner-#This is expected to be the first iPhone to run on the most advanced 4G networks, known as LTE (long-term evolution). As a result, the goal of streaming high definition-quality video and other bandwidth intensive applications inches closer to reality. Based on several consumer surveys that reflect strong interest in an LTE iPhone, Sutherland now says Apple will sell 24.1 million phones in the company’s fiscal fourth quarter (ended December), which is 2.5 million more phones than he previously forecasted.

The analyst says the iPhone will be the first of several hits in its updated product line, all of which will entice investors to add to their holdings. Look for a smaller version of the iPad to be released this fall, before anticipation starts to build around the updated “Apple TV.” Though details remain sketchy, Apple is said to be lining up content partners as it puts the final touches on a user interface that is expected to shake up the staid TV industry. When it formally arrives, however, is still an open question.

Of course for Apple, the point of such a device, which will likely carry modest profit margins, is to provide yet another platform for consumers to buy content from Apple as it has done so well with its iTunes library of music and movies. While many gush over the “razors” in this business model, it’s still the “razor blades” that will likely yield ever-higher profits for Apple down the road. 

So why does Sutherland use $885 as a price target? Because he figures Apple should trade at 14 times his projected 2013 earnings estimate of $52.60 per share (after cash is excluded). 

Risks to Consider: Apple’s competitors are pushing hard to capture market share. As such, a number of competitive new products will likely be hitting the market just as Apple gets set to relaunch key products. Apple has trounced the competition thus far, but it’s wise to recall the Sonys (NYSE: SNE) and Research in Motions (Nasdaq: RIMM) of the world. It’s extremely hard to stay on top of the field for an extended period of time.  

Action to Take –> If any company can maintain its hegemony, it is Apple. In the post-Steve Jobs era, the company hasn’t skipped a beat.  The Wedbush analyst is correct in noting that Apple’s stock is highly sensitive to new product releases. But if he’s right and this stock shoots nicely higher in coming months, then the temptation for many to take profits will be hard to resist, especially as Apple starts to take an overwhelmingly dominant size in many portfolios.