BAML: Apple isn't the only smartphone stocks you should buy (AAPL)

Apple introduced a new version of iOS at it's developer conference today, which has drawn a lot of attention. But savvy investors would be smart to look at the company's competitors to capture even more growth.

According to Bank of America Merrill Lynch, Samsung, LG and Sony are all worth investing in, each for their own reasons.

In general, the smartphone market is still set to grow. BAML lowered estimates of 2017 growth from 7% to 4%, but raised its estimate for 2018 from 5% to 7%. Most people replace their phone every two years, and new models from Apple and Samsung are set to drive early 2018 devices sales, according to BAML. Average selling price across manufacturers is also set to increase 3% in 2018.

Apple's new iPhone and iOS are set to drive more people to upgrade, and a new OLED screen means a higher average selling price for the phone. BAML rates the company a buy with a price target fo $180, about 17% higher than its current price of $153.90.

Samsung is the first company that comes to many consumers minds when thinking of Android handsets. The company sells a large number of devices in the US, but also does well in other countries like India and Brazil. BAML set a price target of 3 million Korean won ,30.5% higher than its current price of 2.3 million won.

LG has turned around its smartphone business and is currently the number two seller in Korea, and the number three in the US and Brazil. BAML said this is a reason to believe the turnaround for LG will to continue. New CEO Jo Seong Jin has minimized inefficiencies in LG's supply chain and has achieved record-high profits from its home appliance business. BAML rates LG a buy with a price target of 86,000 won, up 10.4% from its current price of 95,000 won.

Sony doesn't immediately come to mind when thinking of smartphones, and the company isn't trying to change that, according to BAML. But, Sony is trying to turn a profit from its phone business. The company recently dropped its mid-range phone line to concentrate on phones with a higher selling price. This means Sony's other businesses have the chance to shine and carry its shares higher. BAML set a price target of 4,500 Japanese yen, 7.8% higher than its current price of 4,174 yen.