Monday, December 28, 2009, 01:00 pm
Apple seen selling 1.4 million $600 "Kindle Killer" tablets in 2010Even before it's been validated with a formal introduction, Apple's eagerly-awaited tablet device is being positioned by some members of the investment community as a device that could sell 1.4 million units in its first 9 months, just as others reiterate claims that it'll thrash Amazon's Kindle device in the process.
In a reactionary report released Monday afternoon, Piper Jaffray analyst Gene Munster said his own conversations with Taiwanese component suppliers last week reaffirm his belief that Apple will in all likelihood ship a tablet by March, with an unveiling coming as early as late January.
He estimates Apple will initially be capable of moving 162,000 of these devices per month, for an average yearly run rate of about 2 million units.
"For purposes of sensitivity, assuming the tablet comes out in March 2010, we believe Apple would sell around 1.4 units at a $600 [average selling price] in 2010," he wrote. "The tablet is not yet included in Street models, so we expect the multiple to expand as tablet hype builds ahead of the announcement, and numbers to go up once the device is announced."
Munster's comments come on the heels of media reports that pinpoint Apple as the direct -- or indirect-- owner of various tablet-suited trademarks such as iSlate, Magic Slate, and TabletMac. They also follow a pair of reports from earlier in the day that claim Apple has placed large orders for 10-inch tablet displays with reinforced glass panels.
While speculation has run rampant as to precisely how Apple plans to market and position the new handheld in the market place, Munster is a firm believer that the company will leverage the success of its App Store in allowing the device to run a flurry of available iPhone apps, in addition to a new breed of full-screen apps, all atop a more advanced version of its iPhone operating system.
"While there are several options ranging from a touch screen Mac OS X to an iPhone-like OS, we expect the tablet to be driven by a new version of Apple's iPhone OS that runs a new category of larger apps alongside all the current apps from the App Store," he said. "We believe Apple's tablet would compete well in the netbook category even though it would not be a netback."
In addition to serving as a new platform for iPhone apps and web surfing, Munster is also betting that the unannounced product will cater to entertainment junkies through tie-ins to Apple's ubiquitous iTunes Store. Recent reports have suggested that two network operators -- CBS and Disney -- are in serious negotiations with Apple over an iTunes TV subscription service that could offer tablet owners hours upon hours of their favorite television content for a low monthly fee.
Meanwhile, earlier reports had suggested another focus of the tablet would be the transformation of newspapers, magazines and other print media, with Apple reportedly courting several of the industry's largest publishers into private discussions on the matter.
For their part, Apple executives would later downplay these rumors, claiming they weren't enthusiastic about the online book and newspaper market, which they said was tied to an "unattractive industry structure."
Still, some industry watchers believe Apple could use its tablet device to drastically alter the landscape for print and digital print media by shaking things up and changing the rules of the game. For instance, it's been reported that some publishing executives didn't give a warm reception to Amazon's Kindle eBook reader because the retailer wanted to keep 70 percent of revenue.
Those same reports suggested that Apple's could implement a more attractive structure, similar to its iPhone App Store business model, where the company keeps only 30 percent of sales revenues and the publishers take home the rest of the pie.
Though talk of the Apple tablet as a digital book reader had fizzled in recent weeks, it was rejuvenated this week when Digg founder Kevin Rose claimed during the latest episode of This Week in Tech to know a source that has been describing the Apple tablet as a "Kindle killer" due to an emphasis on eBooks.
"Expect to see a lot of Kindles on eBay after the announcement," he said.
Meanwhile, another guest on the technology talk show, Robert Scoble, also claimed to have an Apple source of his own who's been echoing a focus on text. He said the tablet will be one of the first to truly take advantage of Apple's Quartz interface layer's advanced text support.
As Electronista points out, both Rose and Scoble have historically mixed track records when it comes to Apple-related rumors.
Should Apple manage to sell an estimated 1.4 million tablets during 9-month span of April to December, it would stand to pad its top line by an additional 2%, according to Piper Jaffray's Munster.
On Topic: Future Hardware
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