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Thu, Mar 18, 2010 - 10:21 AM EDT — AAPL: 223.00 (-1.12, -0.5%) | NASDAQ: 2388.14 (-0.95, -0.04%)

RBC Capital analyst: Tablet could generate over $4 billion for Apple in first year

Friday, January 22, 2010 - 12:41 PM EDT

"Selling an estimated 5 million units in its first year as a 'base case' scenario, Apple's tablet would earn the company $2.8 billion in additional revenue and solidify it as more than a niche product, a prominent investment baking firm said Friday," Neil Hughes reports for AppleInsider.

"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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Jan 22, 10 - 01:46 pm Comment from: iStepchild

I analygestimate somewhere between $100 dollars profit and $10 billion profit currently.

I have no clue...just like everybody else.

The first four letters in the word "analyst" say it all.

Jan 22, 10 - 01:48 pm Comment from: Dirty Pierre le Punk

'a prominent investment baking firm'?

Jesus, why didn't I think of that? There must be millions to be made.

Jan 22, 10 - 01:53 pm Comment from: Dualies Ghost

The Tablet will replace the white Mac Book altogether.

Jan 22, 10 - 01:59 pm Comment from: ChrissyOne

I really hope I don't have to buy another wireless plan, because I won't.

Jan 22, 10 - 02:01 pm Comment from: Radius

If it's glossy I will be outraged! And it had better have a floppy drive.

Jan 22, 10 - 02:05 pm Comment from: ChrissyOne

Floppy drive?!?! Slow down there Mr. Jetson... How am I going to read my magnetic tapes?

Jan 22, 10 - 02:13 pm Comment from: R2

I wonder how the iSlate will handle videos. Do we need to convert our collection to MPEG4 movies specifically for the iSlate? If so that'll take forever and use up a lot of memory.

Jan 22, 10 - 02:18 pm Comment from: Sander

This is the same moron "analyst" who predicted AAPL to fall to $70 a year ago only to be humiliated when Apple reported enormous gains. Abramsky was off by over $350 million and $0.30 EPS!

http://brainstormtech.blogs.fortune.cnn.com/2009/02/08/mike-abramskys-bad-apple-advice/

Jan 22, 10 - 02:26 pm Comment from: Randian

Please, Steve, a punch card reader too!

Jan 22, 10 - 02:34 pm Comment from: Jersey_Trader

Will they count the iSlate as a Mac running OS X as they consider the market share in the PC world? If you can use a mouse or keyboard, they are going to have to.

So, why is the iPhone and iPod touch not counted? How about the AppleTV? They all run Apple's OS X and mouse and keyboard can be connected to them. Apple and it's OS X have a much larger market share than the talking heads will admit too. Someone should demand a REAL RECOUNT!

Jan 22, 10 - 02:34 pm Comment from: Jubei

@Sander

Yep. Amazing how one can be so clueless yet still has his job.

Jan 22, 10 - 03:11 pm Comment from: Beavertail

Oh those crazy Canucks at RBC, what next?!

Jan 22, 10 - 04:25 pm Comment from: OpJ

In my first pronouncement as an analyst, I proudly predict that if Apple sells a whole shitload of their products, they will make a whole shitload of money.

Can I have my $250,000 base salary now, please?

Jan 22, 10 - 06:09 pm Comment from: ET

These are the geniuses that pay themselves multi-million dollar bonuses after we bail them out - I actually USE products and make my investment decisions based on that. I bought my first Mac in 1984.

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Thu, Mar 18, 2010 - 10:21 AM EDT — AAPL: 223.00 (-1.12, -0.5%) | NASDAQ: 2388.14 (-0.95, -0.04%)

RBC Capital analyst: Tablet could generate over $4 billion for Apple in first year

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Thu, Mar 18, 2010 - 10:21 AM EDT — AAPL: 223.00 (-1.12, -0.5%) | NASDAQ: 2388.14 (-0.95, -0.04%)

RBC Capital analyst: Tablet could generate over $4 billion for Apple in first year

Reader Feedback: = registered.Unregistered users: Feedback from multiple usernames are subject to deletion. Off-topic and posts from suspected astroturfers will be removed.

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