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Wall Street expects Apple's risky iPad to sell 1M-5M in first year

post #1 of 224
Thread Starter 
With an aggressive $499 starting price point, Wall Street analysts believe Apple's e-reading, game playing, media consuming iPad device is a worthwhile risk that will become a multi-million seller in its first year.

Across the board Thursday, analysts were bullish in their reactions to Apple's newly announced multi-touch iPad. First-year sales predictions range from 1 million to 4 million, with potential for growth even further as the market expands and further iterations of the product improve.

Analyst Charlie Wolf with Needham & Company called the iPad "another winner," noting that the device's true potential will not be realized until developers create new software for it on the Apple App Store.

"Apple is a company willing to take risks and define new categories of products," Wolf said. "The iPad is not a revolutionary product. But it has the potential to become one once the creative juices of content providers are unleashed."

Acknowledging that reaction from the tech community has not been particularly enthusiastic, analyst Mike Abramsky with RBC Capital Markets quipped that "not everyone initially liked the Ten Commandments either -- but they endured."

RBC Capital Markets

Abramsky said the $629 starting price for the 3G-enabled iPad, along with an absence of what he called "hoped-for features," may leave some investors skeptical of the iPad -- but they shouldn't be.

"With iPad, Apple creates a revolutionary e-reading, browsing, media, gaming experience," Abramsky wrote to investors Thursday. "Newspapers, Web pages, books 'come alive' with video, animation, color and fullscreen touch."

He did note that the lack of Verizon compatibility, absence of a camera, and inability to multitask were disappointing. But Abramsky believes the simplicity of the iPad will be its greatest strength.

He has forecast first-year sales of 5 million, adding 30 cents earnings per share to AAPL stock with an average iPad selling price of $600.

Kaufman Bros.

Analyst Shaw Wu noted the $130 premium for the 3G-connected iPad could be a deterrent for potential buyers. He believes the Wi-Fi only version of the hardware could ultimately prove to be the best seller.

In addition to hardware price, Wu said 3G speeds are typically too slow for primary Web browsing. Plus, he said consumers will likely be reluctant to buy an additional data plan if they already have one with a smartphone.

"We see iPad as a new product category that is superior as a shared device in a group setting (such as a living room or meeting) or as an ultra-portable computer," Wu wrote. "Sure, there could be some cannibalization, but it doesn't quite replicate the functionality or for m factor of either device."

The analyst had hands-on time with the device and came away impressed. Wu did not forecast first-year sales, but noted that supply chain checks indicate Apple intends to build 5 million units in its first 12 months, and as many as 10 million units in its second year.

Needham & Company

Wolf has taken a long-view with the iPad, noting that the iPod and iPhone both got off to relatively slow starts before they experienced explosive growth. But the iPad has an advantage, he said, due to its access to more than 140,000 applications on the App Store.

Because Apple is defining a new category of devices, sales of the iPad are likely to ramp slowly," Wolf said. "But the $500 starting price point is low enough to attract a sizable portion of the early adopter crowd, consisting of iPhone and iPod owners.

"It's noteworthy that the iPad's initial price is below the iPhone's initial price and not much higher than the price of the first iPod, introduced in 2001. Our best guess at this time is the Apple could sell four million iPads in its initial year on the market, which translates into at least $2 billion of revenue."

Initial plans are for the iPad to only be sold through Apple's online and retail stores. However, Wolf said he would expect the device to see wider availability in the future.



Oppenheimer

Analyst Yair Reiner noted that although the iPad was revealed in a presentation that lasted over an hour, its true use and potential will take some time to be realized.

"It won't happen overnight," he said, "but in time, we believe that what looks today like a big iPhone or amputated netbook or a souped-up photo frame will be revealed as a revolutionary new media device."

He noted that copycat devices will inevitably crop up, but Apple's advantage lies in the iTunes ecosystem. Competitors will have a hard time replicating the 125 million active iTunes accounts with credit cards that Apple has in its camp.

Reiner has included sales of 1.1 million iPad units in the first year in his projections, a total he said is conservative. For the second year, he has forecast 4 million, while checks with suppliers indicate Apple is prepared to ship 10 million units.

Oppenheimer has increased its price target for AAPL stock to $265, from $255.

Broadpoint.AmTech

Analyst Brian Marshall said he believes Apple "surpassed expectations" with the iPad reveal. He had initially forecast 2.2 million shipments in the first year, but said he now believes "an order of magnitude higher number is likely more accurate."

Marshall did a breakdown of hardware costs for the device, and believes the $499 model would cost Apple $290.50 in to manufacture. The high-end $829 model has an estimated component cost of $383, resulting in a gross margin of 54.4 percent.

With margins that high, Marshall said Apple could add as much as $1.34, or 11.2 percent, to its earnings per share with sales of 7 million iPads at a $628 average selling price. The average gross margin of 48 percent would add $4.4 billion in revenue, or $1.3 billion in net income.



Marshall said he did not fully appreciate the iPad until he had a hands-on demo with it.

"While we were impressed with the specs during the briefing given by Mr. Jobs, it was not until we actually used the iPad for ~15 minutes we were convinced this will be another grand slam product for AAPL," he said. "The ergonomics and 'media' experience of the device (i.e. Internet browsing, e-reading and watching videos on the 9.7" screen) stood out the most to us."

Caris & Company

Buy, don't sell, on the news, is the recommendation of analyst Robert Cihra. Like all other analysts, he believes the iPad will be a success, based on Apple's ability to leverage the unique in-house core abilities ranging from hardware and software engineering to the existing iTunes ecosystem.

"We believe investors should be buying AAPL share, not 'selling the news,' with consensus numbers too low and valuation quite compelling," Cihra said.

He noted that Apple doesn't do cheap, it does different, and the $499 competitive price of the iPad will be a strength to kickstart the platform. He also has high expectations for the iBooks app and its accompanying iBookstore.

"Taking a page out of its own playbook, we see no reason why the new iPad+iBookstore can't do for print media what iPod+iTunes did for music," he said, "while we think gaming also holds potential as a long-term homerun."
post #2 of 224
The iPad is at the moment a niche product. The "analyst" are making predictions based off tech chatter and just the companies history.

I feel this device will evolve (obviously) but not until 2011. Apple has left the door wide open for future upgrades and much of the features that individuals want can easily be enabled through a software update

Who's to say by March/April Apple will announce more features for the device which will make it more appealing?

The iPhone was introduced in 2007 and during the initial keynote "YouTube" was not shown in the demo but during the release of the product, we had YouTube on the device.

Apple conceived the iPad for the EDUCATION MARKET, MEDICAL INDUSTRY, AND CASUAL TECHNOLOGY USERS.

I'm pretty sure we will hear more about what will be on the iPad. Though as it currently stands it's a niche product due to the lack of content. That may not be the case when it is released. Devs have 60/90 days to design for the device.


CHECK OUT THE BEHIND THE SCENES VIDEO OF JOBS AND MOSSBERG FROM ALL THINGS D The video is on the right.

http://kara.allthingsd.com/20100128/...or-an-ipod-xl/

Jobs said that publishers have held back from Amazon and their not happy with their current business model for the distribution of their content
Apple!

Think Different
Reply
Apple!

Think Different
Reply
post #3 of 224
"In addition to hardware price, Wu said 3G speeds are typically too slow for primary Web browsing. Plus, he said consumers will likely be reluctant to buy an additional data plan if they already have one with a smartphone."

That's an excellent point. Since I'll already have my iPhone along with me, does it really make sense to spend $130 + monthly charges to have slow 3G access?

I think i'll grab WiFi only version now then pick up a LTE one in 2 years.
post #4 of 224
In 60 days I think Apple will have multitasking fleshed out in the OS ready for shipping iPads. We may even see Flash 10.1.

And in the next 2 month, developers will have some time to come out with some killer apps that will demonstrate the true potential of the iPad.
post #5 of 224
Quote:
Originally Posted by Outsider View Post

In 60 days I think Apple will have multitasking fleshed out in the OS ready for shipping iPads. We may even see Flash 10.1.
.

Seriously doubt that.

Quote:
Originally Posted by Outsider View Post

And in the next 2 month, developers will have some time to come out with some killer apps that will demonstrate the true potential of the iPad

But agree with that.
post #6 of 224
We regularly mock these analysts, but for me, they seem to have got the point better than half the armchair experts on this an similar sites.

The iPad is about moving information consumption in the home away from the traditional television and general purpose computer. Our laptops etc. are like early cars. Big, complicated, and need constant fettling to keep them running sweetly. Nowadays, the car industry has matured, and the most popular cars are essentially appliances (step forward, Toyota Corolla). You're average Corolla (or Auris, or whatever they're called now) have no idea how their car works. They just know that when they get in their car, it will just work. There are niche drivers who want the latest and greatest performance (buy an Ariel Atom) -- build your own PC types -- and others who are cheapskates and buy some cheap and nasty Korean thing -- or a netbook in the computer world.

This is where I think computing appliances are now heading. We will end up with a number of appliances in the house that do a few different things, but do each of them well. The iPad is not the destination, it is the beginning of that new journey. It's not about the hardware (well, except maybe the damn camera!), it's not really just about the software either. It's about the whole user experience. How you interact directly with the device; what information and media you can consume on it; the eco-system through which this information is gathered or disseminated.

I think that as of right now the iPad does a lot of the things that I want out of a living room infomedia appliance. I think that once the devs and accessories guys get hold of it, it'll allow us to do some amazing things that we've never thought about. Remember, the iPhone didn't do that much new when first launched. It wasn't so much what it did, but the way it did it. I suspect that the iPad will be just the same.
post #7 of 224
Quote:
Originally Posted by Outsider View Post

In 60 days I think Apple will have multitasking fleshed out in the OS ready for shipping iPads. We may even see Flash 10.1.

And in the next 2 month, developers will have some time to come out with some killer apps that will demonstrate the true potential of the iPad.

I think you will find that Apple becomes the de facto tablet company within the first year. When they design and create products they know what they are doing and you buy one even if you didn't think you wanted one :-)
post #8 of 224
http://www.youtube.com/watch?v=lQnT0zp8Ya4

Hitler responds to the iPad.

Here's what's wrong with this bleeding edge technology:

1. UGLY bezel.
2. No multitasking / no OSX.
3. No camera.
4. No GPS.
5. Horrible name. Period.

I'm going to wait for the HP Slate. Office 2010 + Windows 7 is going to rock.

post #9 of 224
I think it's going to be a niche product as well. One industry that I think would benefit greatly would be the medical field.
post #10 of 224
Why would we ever see Flash?, its a resource hog, and opens the door to ANY flash software no matter how indifferent the application- enabling Flash is a gateway to losing control of the platform and that's not going to happen.
post #11 of 224
Quote:
Originally Posted by ghostface147 View Post

I think it's going to be a niche product as well. One industry that I think would benefit greatly would be the medical field.

WRONG. My father's a doctor and he uses a Dell XT2 that works with both a stylus and touch. To fill out the electronic patient files, he NEVER uses his fingers. The stylus here is absolutely essential because it provides much higher precision.

http://www.dell.com/tablet/
post #12 of 224
The iPad seems to have the same potential impact on the huge and growing netbook market that the iPhone has had on the smartphone market. With the iPad in the mix, why would a consumer buy a netbook PC? (Corporate IT staffs have their own agendas, of course, and are another story.)
post #13 of 224
In the less than a day since introduction the analysts have researched all possible futures and polled the entire world. The result being the unquestionable assertion that Apple will sell some amount of ipads in the next year.

Please drop your fees in the box n the corner on your way out.
post #14 of 224
Quote:
Originally Posted by bostondude55 View Post

http://www.youtube.com/watch?v=lQnT0zp8Ya4

Hitler responds to the iPad.

Here's what's wrong with this bleeding edge technology:

1. UGLY bezel.
2. No multitasking / no OSX.
3. No camera.
4. No GPS.
5. Horrible name. Period.

I'm going to wait for the HP Slate. Office 2010 + Windows 7 is going to rock.


Don't tell me, yet another Downfall parody.

No OS X is a good thing. Desktop OS on a small tablet device is a disaster. Just ask Microsoft.

Re. the bezel -- it's there for a reason. If you had a thin iPhone like bezel, you'd keep covering/touching the screen. You'd quickly get pretty annoyed with false taps on the screen.

No camera. Yes, that's a bitch!

I think it does have GPS, even the non-3G one.

I'm not overly keen on the name either (and like what you did there!). I'd have preferred iBook.

I'm interested to see what the HP Slate is actually like. I can't imagine how horrible running Office 2010 in it's desktop form on a (admittedly multi-touch enabled) desktop OS is going to be...
post #15 of 224
Quote:
Originally Posted by bostondude55 View Post

http://www.youtube.com/watch?v=lQnT0zp8Ya4

Hitler responds to the iPad.

Here's what's wrong with this bleeding edge technology:

1. UGLY bezel.
2. No multitasking / no OSX.
3. No camera.
4. No GPS.
5. Horrible name. Period.

I'm going to wait for the HP Slate. Office 2010 + Windows 7 is going to rock.



Why wait? Just buy one of the 10+ year old Dell 'tablets', they have to be pretty cheap now on ebay. I did get a chuckle thinking about microsoft coming out with a touch version of Office, so thank you
post #16 of 224
Quote:
Originally Posted by RichyS View Post


I'm not overly keen on the name either (and like what you did there!). I'd have preferred iBook.

So you suggest they change the name of the product they already called iBook to um...?
post #17 of 224
There is no 'risk' with this product. It's gonna sell easier than selling a conspiracy to a socialist.
Loads of people I know are gonna buy this thing. It fit's so many niches.

No camera is a bit of a shit mind. I wonder if it was a bandwidth thing? I can imagine the popularity of videoconferencing and other video related uses on a device such as this could cause a bit of a headache for 3G networks.
post #18 of 224
Quote:
Originally Posted by RichyS View Post

Don't tell me, yet another Downfall parody.

No OS X is a good thing. Desktop OS on a small tablet device is a disaster. Just ask Microsoft.

Re. the bezel -- it's there for a reason. If you had a thin iPhone like bezel, you'd keep covering/touching the screen. You'd quickly get pretty annoyed with false taps on the screen.

No camera. Yes, that's a bitch!

I think it does have GPS, even the non-3G one.

I'm not overly keen on the name either (and like what you did there!). I'd have preferred iBook.

I'm interested to see what the HP Slate is actually like. I can't imagine how horrible running Office 2010 in it's desktop form on a (admittedly multi-touch enabled) desktop OS is going to be...

for people complaining about the name (it sounds weird i guess, i'm okay with it) and wanting it to be called ibook, do you think that a company that's released a product that had the name ibook before, will launch a completely different product with the same name?
post #19 of 224
Quote:
Originally Posted by monstrosity View Post

There is no 'risk' with this product. It's gonna sell easier than selling a conspiracy to a socialist.
Loads of people I know are gonna buy this thing. It fit's so many niches.

In fact - this is the opposite of a niche product. It will work for everybody in one way or the other. If this thing was lying around at home who would NOT use it?
post #20 of 224
Quote:
Originally Posted by RichyS View Post

Don't tell me, yet another Downfall parody.

No OS X is a good thing. Desktop OS on a small tablet device is a disaster. Just ask Microsoft.

I'm not saying JUST having a desktop os is a good idea, I'm saying the base operating system should be something less trivial and less "locked-in." The reason why the Dell XT2 works because it runs Windows 7 ... which enables multi-touch enabled proprietary programs / or "applications" to work. For example, my dad's hospital uses a health care software suite. He usually never closes that program during work hours. But after work, he can run whatever he wants because below this software suite, he gets the full blown version of Windows 7.

Hopefully HP will develop a UI wrapper above Windows 7 to make it's UI more enjoyable. Kinda of like how Windows Media Center works, Microsoft can easily build a tablet wrapper around Windows 8. Have its own app store. Nifty icons. etc.
post #21 of 224
They'll be lucky to break a million. No more than 2 million.
post #22 of 224
Quote:
Originally Posted by AdamIIGS View Post

So you suggest they change the name of the product they already called iBook to um...?

There's nothing wrong with reusing the name IMO. That said I don't mind iPad.
post #23 of 224
Quote:
Originally Posted by monstrosity View Post

There's nothing wrong with reusing the name IMO. That said I don't mind iPad.

The iPad doesn't have the same sex appeal as the iPhone. Imagine saying.. hey, do you have my ipad to any female... lol.

Bloody pads.
post #24 of 224
iPad fits in well with the mobile nomenclature of IP: iPod, iPhone, iPad

iBook is already taken and iBunch wouldn't work

with the Mac nomenclature there are some possibilities: MacPad, MacTab, MacJournal. but the Mac nomenclature is more about laptops, desktops and that realm of power and use.

Maybe the iPad is the 5th choice on the list, but the first available that still met the requirements.
post #25 of 224
[QUOTE=Outsider;1559973]In 60 days I think Apple will have multitasking fleshed out in the OS ready for shipping iPads. We may even see Flash 10.1.


There is as much chance for that as Apple preloading Windows 7 in bootcamp on their Macs
post #26 of 224
Quote:
Originally Posted by paxman View Post

In fact - this is the opposite of a niche product. It will work for everybody in one way or the other. If this thing was lying around at home who would NOT use it?

Well thats true. I'm buying two, one for developing with and one which I'm just gonna have kick around the house for my family to use, or when someone goes traveling or light browsing etc. So many uses.
post #27 of 224
Quote:
Originally Posted by bostondude55 View Post

The iPad doesn't have the same sex appeal as the iPhone. Imagine saying.. hey, do you have my ipad to any female... lol.

Bloody pads.

do you pad lightly or heavy? hmmmm?
post #28 of 224
Quote:
Originally Posted by estyle View Post

i
iBook is already taken.

For what?
post #29 of 224
Quote:
Originally Posted by AdamIIGS View Post

So you suggest they change the name of the product they already called iBook to um...?

They've not sold a product called iBook for a good while now. I think consumers could cope with the confusion...

The only reason I can think of for not calling it the iBook is that it would place too much emphasis on one function of the device.

iPad is okay. Much better than iSlate or iTablet. I just like the sounds of 'iBook'...
post #30 of 224
Quote:
Originally Posted by estyle View Post

do you pad lightly or heavy? hmmmm?

LOL

i wouldn't be surprised if apple changes this device's name during its relaunch in 2011.

apple's rapid response (PR) team already pulled the most viewed MadTV iPad parody (on Youtube). it had over 600k views. they're definitely concerned.
post #31 of 224
Did you hear Jobs say to Mossberg "Publishers are going to pull their books from Amazon because they're not happy with them..." (video cuts awkwardly at that point)

Also, the bezel is necessary because of the way you will hold the device - an iPhone or Touch is sort of cupped in your hand, or pinched at the bottom (where there is a bezel). The iPad's size will require you to often grasp it between your thumb and fingers, and that will be done along the edge where the bezel is, otherwise you would be covering content and inadvertently activating touch gestures.
post #32 of 224
Quote:
Originally Posted by RichyS View Post

The only reason I can think of for not calling it the iBook is that it would place too much emphasis on one function of the device..

Precisely, that is the only reason, and it's a good reason. They needed a generic name.
post #33 of 224
Quote:
Originally Posted by RichyS View Post

We regularly mock these analysts, but for me, they seem to have got the point better than half the armchair experts on this an similar sites.

The iPad is about moving information consumption in the home away from the traditional television and general purpose computer. ....

Good post - a suggestion I read elsewhere on another blog was that you end up with one main media computer/hub in the house for your backups and synching and everyone has there own ipad so they can do their own browsing etc with out having to compete for the main computer - much cheaper than having multiple desktops and much better experience than laptops - which are hot as hell and not great to lounge about with.

If you want to type large amounts of text you need a full size keyboard and a desk. Most serious laptops get used at a desk not sitting in a lounge chair. This is not a desk bound computer.

The ipad works for me - I will probably buy one as a replacement for my ibook g4 which has just died - we have several other computers in the house and I used the ibook for browsing etc because it was small - current macbooks are too big and bulky - especially on a plane. Appeals to me much more than a netbook
post #34 of 224
Quote:
Originally Posted by monstrosity View Post

Well thats true. I'm buying two, one for developing with and one which I'm just gonna have kick around the house for my family to use, or when someone goes traveling or light browsing etc. So many uses.

i think you are spot on about its general use.

I think that just like the iphone/ipod touch was general, industry found ways to make it specific for them. Best example the checkout system in the apple store.

the ipad has the same potential but with greater power applications that can be developed. And with the larger screen, this could replace a lot of paper forms for things like real estate agents.
post #35 of 224
Quote:
Originally Posted by monstrosity View Post

For what?

for the iBook laptop computer that people still use, and other people still sell on ebay, and companies still support with replacement parts, and software companies that still sell old titles, and historians still keep track of because of its originally cool color clamshell case. Need more?
post #36 of 224
Quote:
Originally Posted by doyourownthing View Post

for people complaining about the name (it sounds weird i guess, i'm okay with it) and wanting it to be called ibook, do you think that a company that's released a product that had the name ibook before, will launch a completely different product with the same name?

It's not totally unheard of to reuse an old name for a different product. The name hasn't been used in a product for about four years, and given Apple's significant growth, it might well be that most of Apple's current and prospective customers might have never heard of the old product name.

A more plausible reason is that "iBook" implies a very specific purpose, when the product itself is a lot broader than that. The old iBook was to mean it was a consumer notebook computer. Now, with the book store feature, there's a small risk of typecasting because of the name.

Personally, I wished Apple would phase out the "i" naming system.

The complaints about the cost of the 3G radio doesn't seem to look at the fact that it's unlocked, and the plan is a lot cheaper than similar plans for netbooks. I haven't seen a data plan for a large screen computer device for $15/mo, ever. I recall a data plan for $10/mo for a feature phone with a 1" screen, that's it.
post #37 of 224
A single multi-functional device starting $500 that can replace at less four-five devices that are currently out in the market. This thing will sell like hot cakes, maybe even exceed analyst's expectations. Ultimately, i think the limited memory (16GB-64GB) and without USB ports for add-ons is the biggest drawback.
post #38 of 224
Quote:
Originally Posted by ggf View Post

Good post - a suggestion I read elsewhere on another blog was that you end up with one main media computer/hub in the house for your backups and synching and everyone has there own ipad so they can do their own browsing etc with out having to compete for the main computer - much cheaper than having multiple desktops and much better experience than laptops - which are hot as hell and not great to lounge about with.

If you want to type large amounts of text you need a full size keyboard and a desk. Most serious laptops get used at a desk not sitting in a lounge chair. This is not a desk bound computer.

The ipad works for me - I will probably buy one as a replacement for my ibook g4 which has just died - we have several other computers in the house and I used the ibook for browsing etc because it was small - current macbooks are too big and bulky - especially on a plane. Appeals to me much more than a netbook

i do like the fact that you can connect your apple bluetooth keyboard to it. I expect that that ability (greater than simple headphones) may lead to other interesting BT accessories down the road.
post #39 of 224
Quote:
Originally Posted by AppleInsider View Post

He did note that the lack of Verizon compatibility, absence of a camera, and inability to multitask were disappointing. But Abramsky believes the simplicity of the iPad will be its greatest strength.

This is the kind of double speak that reveal the so-called analysts to be just a bunch bs swillers.
post #40 of 224
Quote:
Originally Posted by JeffDM View Post

It's not totally unheard of to reuse an old name for a different product. The name hasn't been used in a product for about four years, and given Apple's significant growth, it might well be that most of Apple's current and prospective customers might have never heard of the old product name.

A more plausible reason is that "iBook" implies a very specific purpose, when the product itself is a lot broader than that. The old iBook was to mean it was a consumer notebook computer. Now, with the book store feature, there's a small risk of typecasting because of the name.

Personally, I wished Apple would phase out the "i" naming system.

but the great thing about ipad is, like was mentioned above, it doesn't mean anything. The name doesn't recall images of a laptop, it doesn't recall images of an ebook reader, and it doesn't recall images of a netbook.
The name is wide open to grow into its own image.
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