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iPad sales to prop up revenue as Apple readies new products, report says

An AAPL investor report released on Tuesday estimates that the iPad will carry a healthy portion of sales over the next two quarters while the company prepares to launch a next-generation handset and new laptop models.

Barclays Equity Research believes Apple's market cap, which stands at $531.28B as of Tuesday, will see further gains as the company continues to pump profits from the PC market with its iPad product line.

The investment bank left its AAPL price target unchanged at $750, giving the stock an overweight rating due to strong iPad and iPhone demand, Mac gains and international expansion. As in previous years, Apple's staggered new product launch cycle will ward off stagnation and keep demand high for its lucrative device lineup.

Spearheading the next two quarters will be the iPad, which now includes an "entry-level" device in the iPad 2 carry-over from 2011. Estimates see Apple shipping 14.2 million iPad unties in the second quarter of the 2012 calendar year which represents quarter-on-quarter growth of 20 percent.

Going further, the report sees upside benefits from a full three month window of availability for the new iPad and estimates that the third quarter will bring a 12 percent increase in shipments or 15.9 million units. In total, the firm expects iPad sales of 57.2 million for fiscal 2012 and 78.5 million for 2013, up 77 percent and 37 percent year-to-year, respectively.

In a separate preliminary first quarter 2012 tablet shipment report from IDC it was estimated that Apple took a 68 percent share of worldwide tablet shipments totaling 17.4 million units, a nearly 16 percent gain from the 2011 holiday quarter.

Once thought to be a minor threat to Apple's iOS tablet, Amazon's reasonably-priced Android-based Kindle Fire seems to have lost its teeth after dropping from a 16.8 percent share of the market at the end of 2011 to just 4 percent in the first quarter of 2012.

Amazon Top Sellers

While the Kindle Fire continues to reign on Amazon's own online store, the iPad has taken 68% of the worldwide tablet market share. | Source: Barclays

"We continue to believe that the iPad will cannibalize PC sales and do not believe that Apple needs to launch a compromised “hybrid” product of a Mac with a detachable screen," writes Barclays Capital analyst Ben Reitzes. "We believe iPad users will increasingly “dock” iPads to keyboards."

Reitzes is referring to recent online murmurs that Apple may be looking to create a competing product to new Windows 8 devices that merge tablet and laptop form factors. The rumors were shot down by Apple CEO Tim Cook, who said during the company's second quarter earnings conference call that while such product was possible, the compromises would outweigh the benefits.

"You can converge a toaster and a refrigerator, but you know, those things are probably not going to be pleasing to the user," Cook said.

On the topic of Windows-based laptops, Barclays believes that expected upcoming refreshes of Apple's MacBook product lines, combined with the summer release of OS X Mountain Lion, will counter any perceived threat from so-called Ultrabooks being pushed by Intel.

"We are very upbeat about the prospects for new MacBook Pros and iMacs to be launched this June quarter – and even more optimistic about a new line of MacBook Airs to likely ship in the September quarter at more attractive price points," Reitzes writes.