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Thursday, November 19, 2009, 06:25 am PT (09:25 am ET)

Piper: Apple tablet no more than $700, launch timing irrelevant

Whether Apple's tablet launches in early or late 2010 is irrelevant, but a sale price of more than $700 could significantly reduce its potential sales, a new report has predicted.

In a note issued to investors Thursday morning, analyst Gene Munster with Piper Jaffray said in a new report that Apple's long-rumored tablet was delayed until the second half of 2010 is "irrelevant" to the company's stock, as current Wall Street models do not reflect sales of the device.

"Expectations for actual units in 2010 are low," Munster wrote, "and investors' focus is more on whether the tablet is real and less on timing."

Piper Jaffray analysts met with component suppliers this summer, who suggested that the tablet would be launched in early 2010. That corresponds with AppleInsider's own sources, who said the hardware will arrive in the first quarter of 2010.

Munster, however, does not buy the claims also reported Thursday that a high-end tablet with an OLED screen would retail for $2,000. He believes that the strategy is to have the device fit between the $199 iPod touch and the $999 MacBook. Piper Jaffray has forecast that the tablet device will cost between $500 and $700.

"As a point of perspective, iSuppli has reported the bill of materials on the iPhone 3GS is $179," the report said. "Backing out the phone functionality, we believe the bill of materials is about $160. Assuming the tablet is 3x the size of the iPod touch implies a bill of materials for the tablet of around $480."

If the hardware were to launch on Sept. 1, 2010, the report projects about 650,000 sales in the calendar year. At an average price of $600, it would equate to about 1 percent of the company's total revenue.

Munster said that though Apple's expected margins for the device are unknown, he believes the hardware will be priced to compete with the growing netbook market, even if it means less revenue for the Mac maker.

The report reiterated the belief that the device will be akin to a larger iPod touch that will run a new version of the iPhone OS. Munster believes the hardware will run iPhone apps, as well as a "new category of larger apps."

Piper Jaffray has a price target of $277 for AAPL stock, with a model that does not include the potential introduction of the tablet. However, Munster has previously predicted that the device would debut in early 2010 and sell about 2 million units in its first year. At an estimated average price of $600, that would net the company an additional $1.2 billion in revenue.