iPad Pro predicted to drive $2.4B in near-term revenue for Apple
Apple's newly launched high-end iPad Pro is expected to make a big splash for the company, with one analyst forecasting the 12.9-inch tablet to be a $2.4 billion revenue opportunity in its first three months alone.
Amit Daryanani of RBC Capital Markets believes Apple can sell 3 million iPad Pro units in the first three months. His prediction was revealed in a note to investors on Tuesday, a copy of which was provided to AppleInsider.
Even if the average selling price of the iPad Pro were to come in at $800, that would imply $2.4 billion in revenue with 3 million units sold. The iPad Pro's starting price is $799 for a 32-gigabyte model, while 128 gigabytes costs $949, and a cellular-capable high-end model is $1,079.
To Daryanani, that would mean $600 million in operating profit for Apple in the first three months of the product's lifespan, adding between 8 and 10 cents in incremental earnings per share to start calendar 2016.
Calling his forecast conservative, Daryanani said his predictions assume gross margins in the 33 percent range, which would be low for Apple. Last quarter, Apple's company-wide gross margins were at 39.9 percent.
Daryanani sees the iPad Pro serving as a big boost for Apple's iPad business -- his estimates call for $2.4 billion in revenue to represent roughly half of total iPad revenue for Apple's March quarter, for example.
RBC has maintained a price target of $150 for shares of AAPL, along with an "outperform" rating.
Amit Daryanani of RBC Capital Markets believes Apple can sell 3 million iPad Pro units in the first three months. His prediction was revealed in a note to investors on Tuesday, a copy of which was provided to AppleInsider.
Even if the average selling price of the iPad Pro were to come in at $800, that would imply $2.4 billion in revenue with 3 million units sold. The iPad Pro's starting price is $799 for a 32-gigabyte model, while 128 gigabytes costs $949, and a cellular-capable high-end model is $1,079.
To Daryanani, that would mean $600 million in operating profit for Apple in the first three months of the product's lifespan, adding between 8 and 10 cents in incremental earnings per share to start calendar 2016.
Calling his forecast conservative, Daryanani said his predictions assume gross margins in the 33 percent range, which would be low for Apple. Last quarter, Apple's company-wide gross margins were at 39.9 percent.
Daryanani sees the iPad Pro serving as a big boost for Apple's iPad business -- his estimates call for $2.4 billion in revenue to represent roughly half of total iPad revenue for Apple's March quarter, for example.
RBC has maintained a price target of $150 for shares of AAPL, along with an "outperform" rating.
Comments
I just finished reading Jason Snell's iPad Pro review. Towards the end he said:
"The iPad Pro does not exist to give comfort to Mac users."
That's exactly the feeling I got reading reviews from long time Mac users who are just occasional iPad uses. Microsoft Surface is all about making legacy desktop PC users feel comfortable. iPad Pro is clearly not. I hope this things sells really well just to shut up all those who claim you can't get real work done on a device that can't run x86 apps.
Sorry, Wacom. No hard feelings, its just business.
I just finished reading Jason Snell's iPad Pro review. Towards the end he said:
"The iPad Pro does not exist to give comfort to Mac users."
That's exactly the feeling I got reading reviews from long time Mac users who are just occasional iPad uses. Microsoft Surface is all about making legacy desktop PC users feel comfortable. iPad Pro is clearly not. I hope this things sells really well just to shut up all those who claim you can't get real work done on a device that can't run x86 apps.
One can't know now, but if the iPad Air 3 supports both 3D Touch and Pencil, that would create a heck of a Pencil market, not to mention sell a lot of iPad Air 3's.
I also would note that MS doubled down on the desktop with Surface, but I'm yet to see any life in mobile, which is where the bulk of Apple innovation is occurring.
It seems obvious to me after demoing, then buying an iPad Pro that the graphic tablet market that's currently owned by Wacom Cintiq is about to get turned on its head. Cintiq was the gold standard in the design industries, but compared to the iPad Pro they now look heavy, slow, poorly designed and built, buggy, expensive, and antiquated. And while we all loved the "drawing feel" of the Cintiq, the iPad Pro is far better in every way. Perhaps Mr. Daryanani has factored in the professional designer market in his projection. If not, he should.
Sorry, Wacom. No hard feelings, its just business.
I disagree a bit. I think most pro designers want to work on a very large screen - not only larger than the Pro, but larger than the 15" laptops. So the ones I know either use an iMac or a laptop with a large screen attached. And those are the people who use a graphic tablet.
What would be ideal is if you could somehow use the iPad (Pro or otherwise) as a tablet input device on a Mac. Anecdotal, but I think every designer I know would line up to buy the iPad Pro if they could do that.
I haven't tried the iPad Pro with the pencil as yet and I don't consider myself to be a pro artist in Illustrator, but I've never been able to get the hang of using current tablets even in Photoshop. Hopefully, Apple has found the magic sauce.
Yes that's the point and I'm glad it's so.
I kinda see the iPad Pro becoming a new market altogether. I see it further separating itself from both Mac and iPad in the future. Wouldn't be surprised if some people owned both an iPad and iPad Pro in 2017, with completely different uses.
Sounds good but like I said above, I see iPad Pro becoming it's own market and I think Apple will further differentiate the device from the others in the future.
3D Touch will definitely come to iPad Air but Pencil? I doubt it will until iPad Pro differentiates itself further.
I disagree a bit. I think most pro designers want to work on a very large screen - not only larger than the Pro, but larger than the 15" laptops. So the ones I know either use an iMac or a laptop with a large screen attached. And those are the people who use a graphic tablet.
What would be ideal is if you could somehow use the iPad (Pro or otherwise) as a tablet input device on a Mac. Anecdotal, but I think every designer I know would line up to buy the iPad Pro if they could do that.
I haven't tried the iPad Pro with the pencil as yet and I don't consider myself to be a pro artist in Illustrator, but I've never been able to get the hang of using current tablets even in Photoshop. Hopefully, Apple has found the magic sauce.
There's an App for that on the Mac and iPad, and if not now, soon on the iPad Pro:
http://astropad.com
3D Touch will definitely come to iPad Air but Pencil? I doubt it will until iPad Pro differentiates itself further.
I'm actually thinking the same thing, but really not even sure if 3D Touch and Pencil are compatible based on the screen technologies; great it Apple can do both in the future.
Savvy article on millennials shifting from PC's to mobile.
http://www.pcmag.com/article2/0,2817,2495580,00.asp
Summary quote:
"It is clear to me that Apple is not content with just owning the consumer market, something that was a key part of Jobs's goal since he rejoined the company in 1997. But Jobs wanted to own the entire market, and it appears that by getting this younger generation hooked on iOS, Cook and team just might be able to deliver on that goal."
I have an iMac as my main work station, and instead of having to carry a MacBook every where I go, I can now use iPad Pro. It is big enough and functional enough with the keyboard to let me use native Apps 90% of the time, and VNC for the handful of things I can't do natively. And on top of that, it can be an iPad when I'm not just working.
I've used Wacom tablets and other drawing pads for decades and literally less than 30 seconds with the iPad Pro was enough to convince me to buy one. Placed my order and hope to have it arrive this week.
I buy most Apple products - very happy with my Watch and its new charge stand - but I'm not sure I would personally choose an iPad Pro over a MacBook. The Pencil is the killer feature here - high resolution screen drawing will work very well for some - but the fold out keyboard means it's a sit-forward device for typing, unless you rely only on the virtual keyboard. It needs a desk to function in that mode, so it's not, in that sense, a "laptop" replacement. Which I guess misses the point - it's mostly a sketch pad, not something I personally would use, but I can think of many situations where it's just fine - taking enormous selfies in tourist spots being the silliest. If it finds its niche, a nice big one, great - another feather in the cap for a company Wall St still seems to feel is about to trip and fall every time it reports ever better earnings. A "one-product" company, unlike Google (a no-product company) or Amazon (everyone else's).
It is actually surprisingly sturdy on your lap. I was working on an assignment in the car and got comfortable quite quickly with it.
I just finished reading Jason Snell's iPad Pro review. Towards the end he said:
"The iPad Pro does not exist to give comfort to Mac users."
That's exactly the feeling I got reading reviews from long time Mac users who are just occasional iPad uses. Microsoft Surface is all about making legacy desktop PC users feel comfortable. iPad Pro is clearly not. I hope this things sells really well just to shut up all those who claim you can't get real work done on a device that can't run x86 apps.
For another great review of the iPad Pro, one should read Serenity Caldwell's piece over at iMore.com.
You're absolutely right on the Surface. Microsoft invented a more expensive netbook. Stuck in desktop mode.
@sagan_student
I stand corrected then - you've tried it, I haven't so I look forward to being pleasantly surprised. Might have to get one then!
It seems obvious to me after demoing, then buying an iPad Pro that the graphic tablet market that's currently owned by Wacom Cintiq is about to get turned on its head. Cintiq was the gold standard in the design industries, but compared to the iPad Pro they now look heavy, slow, poorly designed and built, buggy, expensive, and antiquated. And while we all loved the "drawing feel" of the Cintiq, the iPad Pro is far better in every way. Perhaps Mr. Daryanani has factored in the professional designer market in his projection. If not, he should.
Sorry, Wacom. No hard feelings, its just business.
It will more at the lower price points than the higher ones. I doubt you have ever worked with a cintiq. The larger ones are heavy for a reason. It provides a large stable surface that can be angled, much like a drafting table.
That might seem like an antiquated concept, but if you have to spend hours interacting with it, you are likely to appreciate good ergonomics and lack of shoulder pain.