“Mike Abramsky with RBC Capital Markets, the corporate and investment banking division of the Royal Bank of Canada, has projected a $600 average selling price for Apple’s forthcoming tablet. That could add 30 cents of earnings per share to the company’s stock, resulting in a $5- to $10-per-share valuation upside. Another $2.8 billion in revenue would be a 6 percent increase for Apple,” Hughes reports. “Those numbers assume 30 percent gross margin for the hardware, and 3 percent Mac and iPod touch cannibalization. That’s what Abramsky believes is the most likely outcome, as the midpoint in a three-case scenario.”
“On the low end, as a ‘niche’ product, he said the tablet would have an $800 average selling price and sell 1 million units. That would earn Apple $777 million, and amount to 12 cents of incremental GAAP EPS,” Hughes reports. “On the other hand, priced at $500, the product would be a ‘hit,’ selling 10 million units. With 29 percent gross margin, it would mean an additional $4.2 billion in revenue for Apple, amounting to 42 cents EPS.”
Hughes reports, “RBC has predicted a device with a price between $500 and $700 unsubsidized, while it would cost between $200 and $300 subsidized by a wireless carrier. Abramsky said he believes Apple is likely to release two versions of the hardware: one with Wi-Fi only, and another with both 3G and Wi-Fi.”
More information in the full article here.
[Thanks to MacDailyNews Reader "James W." for the heads up.]
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