Wednesday, December 09, 2009, 04:30 am PT (07:30 am ET)
Tablet rumors: February production start, 10-inch LCD screenChecks within Apple's supply chain have led to a new round of tablet-related rumors from one analyst, who believes the device will launch in March or April of 2010 with a 10.1-inch LCD screen.
Yair Reiner, analyst with Oppenheimer, revealed his latest tablet news in a note to investors issued Wednesday morning. He also said that Apple has been reaching out to book publishers with a "very attractive proposal" for offering content on a forthcoming ebook platform.
Reiner believes the tablet could provide an additional 50 cents to 75 cents in earnings per share for AAPL stock.
"Our checks into Apple's supply chain indicate the manufacturing cogs for the tablet are creaking into action and should begin to hit a mass market stride in February," the note said. "At this stage Apple appears to be sizing its supply chain to support production of as many as 1M units per month."
Reiner said Apple would likely need at least five or six weeks of inventory built up before it can release the product, positioning a likely launch in March or April. Such a launch would assume there are no production issues, like the one believed to have led to the last-minute removal of a camera from the latest iPod touch.
He also said that the device will have a 10.1-inch multi-touch display using LTPS LCD technology, the same as on the iPhone. He specifically disputed an earlier report that a high-end model would sport an OLED display.
Apple is also said to be offering publishers a deal that will allow them to release their content on other online stores, such as for Amazon's Kindle, or for new, forthcoming digital storefronts from major publishers. But Apple could sweeten the pot by offering a better deal than some companies, like Amazon, currently offer.
"Contacts in the U.S. tell us Apple is approaching book publishers with a very attractive proposal for distributing their content," Reiner said. "Apple will split revenue 30/70 (Apple/publisher); give the same deal to all comers; and not request exclusivity. We believe the typical Kindle split is 50/50, rising to 30/70 if Kindle is given ebook exclusivity."
He went on to say that the Kindle has "disgruntled the publishing industry" by strong-arming companies into exclusivity through a "wolfish cut of revenue" taken if they sell their content elsewhere. The Kindle also does not allow advertising in content it sells for its device.
"The tablet is set to change that," Reiner said. "It should also make ebooks more relevant for education by simplifying functions such as scribbling marginalia."
Oppenheimer predicts that the company could sell between 1 million and 1.5 million devices per quarter at an average selling price of $1,000. The company has a price target of $235 for AAPL stock.
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