Apple Inc. (AAPL) is working on a new device that would effectively combine smartphone and tablet functionality in one, and that's good news for the stock, according to one team of bulls on the Street. (See also: Why You Should Buy Apple, Dump Amazon and Facebook.)

In a research note Friday, analysts at Bank of America Merrill Lynch reiterated a buy rating on AAPL shares, citing the tech titan's new iPhone products and noting that sales should not be impacted by trade tensions between the U.S. and China. 

“Our checks also suggest that Apple is working with suppliers on a foldable phone (that potentially could double up as a tablet) for launch in 2020,” wrote BofA's Wamsi Mohan in the note obtained by CNBC. He expects AAPL to return more than 30% to shareholders over the next 12 months to reach $220. Trading up about 0.2% on Friday morning at $169.06, AAPL reflects a 0.1% return year-to-date (YTD) and a 20% gain over the most recent 12 months, outperforming the S&P 500's 1% decline in 2018 and 12.9% increase over the year. 

Unfolding the Next Big Thing

Mohan based his report on meetings with several Apple suppliers in Asia, validating rumors that have circulated for years that foldable, flexible phones will become the next big thing for the Cupertino, California-based FAANG company. While rivals such as Lenovo and Samsung Electronics have demonstrated concept devices with foldable screens, and others have filed patents for such models, none have yet to be released for sale. Samsung, which has confirmed its foray into the foldable phone space, is expected to release a device known as the Galaxy X as soon as this year. Some have speculated that the new phone could allow it to be used as both a smartphone and a tablet. 

Last year, Korean media outlet The Investor cited sources suggesting that Apple was working with LG Electronics Inc. (LG) to research foldable screen technology for a device that could reach the market as soon as 2020. While a two-year time frame seems ambitious, the rise of OLED screens, used in the latest iPhone X, should help move the development along. OLED screens, unlike older LCD screens, are made up of independent pixels that allow them to be more flexible. To offer a totally flexible phone however, Apple must double down on innovation to create flexible internal components such as circuit boards, batteries, memory, and other parts. (See also: Apple Enters Content Fray With Texture Purchase.)