“In less that three weeks, we bid adieu to 2009 and say hello to 2010,” Eric Savitz writes for Barron’s. “For tech investors, we get the straight dope on the mysterious, but by all accounts real, tablet project at Apple.”
“Slowly, Wall Street is putting together a picture of the Apple tablet. The conventional wisdom is that, while Apple CEO Steve Jobs and others in the Cupertino politburo consistently say derogatory things about netbooks, there really is an opportunity for the company in that vast empty space between its high-end iPod Touch at around $400 and the low-end MacBook at $1,000,” Savitz writes. “There’s a belief the new device will be more iPod than Mac, with no keyboard, and with significant ties to the App Store. A number of analysts have asserted that the iTablet, or whatever it will be called, will have a 10-inch screen, about the same as a netbook, but one that, like the iPod Touch and the iPhone, relies on touch and gestures. It could be the perfect device for watching video, playing games, reading books and magazines, and surfing the Web.”
Savitz writes, “Depending on how the tablet is priced, it could make a huge dent in the currently red-hot e-book reader market.”
MacDailyNews Take: Define “red-hot.” We’ve seen no hard sales figures on eBook readers beyond the #1 eBook readers, Apple’s iPhone and iPod touch. “Selling out” is meaningless, if we don’t know how many they offered for sale.
Savitz continues, “Apple’s tablet is likely to be based on a variation of either the Mac OS or the iPhone OS and will have the ability for full-scale Web surfing, movie watching and game playing. Seems like no contest.”
MacDailyNews Take: Again, it already is no contest: Kindle, Schmindle: Apple’s iPhone and iPod touch rule eBook market. There’s a reason why Amazon keeps improving their Kindle app for iPhone and iPod touch.
Savitz continues, “Keith Bachman, an analyst with BMO Capital, asserted in a report last week that the device is likely to sell for $700 to $800, but that a [carrier] subsidy of $200 to $300 per unit could bring the end-market price down to the $400-to-$600 range. That would put the tablet’s price above e-book readers and netbooks but below low-end Macbooks.”
“There are other things for Apple holders to look forward to in 2010, but the tablet is the real mystery,” Savitz writes. “If it catches on, Apple could sell them by the zillions and drive consensus estimates for GAAP (or generally accepted accounting principles) earnings for fiscal 2011 north of $10 a share. While the stock has doubled off the bottom, and now hovers a hair below $200, with a market cap of $175 billion, Apple in that scenario actually looks reasonably priced at about 20 times earnings per share.”
Much more in the full article here.