By Josh Ong

Published: 01:50 AM EST (10:50 PM PST)

J.P. Morgan bumped up its projections for shipments of Apple's iPhone in the December quarter to 28 million units, revising its revenue estimates for the company accordingly to $38.69 billion.

Analyst Mark Moskowitz issued a note to clients on Thursday announcing the revised estimates, noting that "Santa's sleigh needs more room for iPhones." Whereas the firm's previous estimate was 25.3 million units, he now predicts iPhone shipments of 28 million for the holiday quarter.

The analyst noted that U.S. carriers have been "surprised by the strong uptake" of the iPhone 4S, as well as the lower-priced iPhone 4 and 3GS models. The older iPhone models are also expected to aid Apple's penetration in emerging markets such as China.

By comparison, Apple's previous best for iPhone sales came in the June 2011 quarter with 20.34 million iPhones. The company saw a sequential decline in iPhone sales in the September quarter, but CEO Tim Cook is confident that this next quarter will set an "all-time high" for iPhone sales.

According to the analyst, sustained demand for all three current iPhone models (iPhone 4S, 4 and 3GS) will push Apple's revenues up to $38.69 billion with $9.87 in earnings per share this quarter. The firm's previous estimate stood at $37.26 billion and $9.45 EPS. Wall Street consensus puts Apple's revenue for the quarter at $38.02 billion and $9.78 EPS.

J.P. Morgan also raised its fiscal 2012 and fiscal 2013 estimates for Apple's handset shipments. The company expects 105.5 million units next fiscal year and 121.7 million in 2013.

By comparison, Apple saw $26.74 billion in revenue in the December 2010 quarter with sales of 16.24 million iPhones and 7.33 million iPads.

Moskowitz did, however, revise the investment bank's iPad estimates slightly downward because of "limited uplift in build activity." He now believes Apple will ship 13.0 million tablets, instead of 13.3 million. Amazon's Kindle Fire, which Moskowitz reports as having "better-than-expected momentum with more price sensitive consumers," is also believed to have a small impact on iPad, though he believes customers will eventually come away "disappointed" with the Kindle Fire. But, in the longer term, J.P. Morgan expects the iPad's retail momentum to continue to accelerate.

As for Apple's Mac segment, J.P. Morgan's estimates remain steady at 5.4 million units. According to Moskowitz, MacBook Air momentum will remain strong without receiving major competition from Intel's Ultrabook specification. Apple is also not likely to be affected by a hard-disk drive shortage that will impact the broader PC market.

Shares of Apple remain a top pick for the firm, which rates the stock as Overweight with a price target of $525.