Gene Munster with Piper Jaffray said in a new note to investors Wednesday afternoon that he expects the long-rumored tablet device to ship by the end of March. Current models for AAPL stock do not include the potential additional revenue the company would receive in 2010 from releasing the device. In other words, he said, shares are currently undervalued.
"We expect the multiple to increase as tablet hype builds and Street models begin to include tablet estimates," Munster said. "While the tablet is not currently in our model, we believe Apple could sell about 1.4M units if the tablet shipped in March, adding 2% to revenue."
Those numbers are based on an average selling price of $600. Speculation on the unannounced product's price has ranged from "shockingly" inexpensive to as much as $2,000. Munster also believes the device would run a new version of the iPhone OS that would run a new category of applications, as well as existing software available from the App Store.
"We believe Apple's tablet would compete well in the netbook category even though it would not be a netbook," he said. "Rather it would focus more on apps, entertainment content (from the iTunes Store), and Web surfing."
Munster isn't entirely confident that the device would be unveiled in January, however. Earlier Wednesday, a previous report suggested the hardware could be introduced by Apple at the start of 2010, and mass production would begin as soon as February.
In addition, Boy Genius Report said Wednesday it has heard from a "connected" source that Apple will be announced in January. That person allegedly said they are confident that the device will come in a 7-inch size -- smaller than the 10-inch screen that has been widely reported. The smaller model reportedly could be in addition to the 10-inch model.
"Would we bet the farm on this?" the report said. "No, but they’ve been amazingly accurate for us in the past and as usual, Apple rumors seem to get more interesting."
But Munster said he believes there is a 75 percent chance of an Apple event in January. It could also be used to introduce a new iPod touch with video, which sources have told AppleInsider has been told remains in Apple's pipeline. The note to investors also said that such an event could be used to introduce a new Apple TV that supports a subscription service.
Numerous reports this week have claimed that Apple is in talks with CBS and Disney in an attempt to offer a subscription plan for TV shows. Sources have said that both companies are currently considering an offer from Apple that would provide them $2 to $4 per month for a subscriber to a broadcast network like CBS or ABC, and $1 to $2 per month for subscribers to a basic cable network.
Munster has long believed that Apple is pursuing a subscription service for iTunes. He also believes the company could add DVR capabilities to the Apple TV, and, at some point in the future, release a connected television set.
Piper Jaffray has maintained its overweight rating for AAPL stock, and has kept its price target of $277.