First iPad estimates: 4 million units in year one, 8 million in 2011
With Apple introducing its iPad tablet on Wednesday at entry-level pricing much lower than anticipated, one prominent research and investment firm was quick to increase its first year unit sales estimates by as much as two-fold, while predicting that 2011 will see the device break out even further.
In a research report to clients, Piper Jaffray analyst Gene Munster said the iPad's $499 entry-level pricing now leads him to believe Apple will sell between 3 and 4 million of the devices in its first 12 months on the market. That's up from his earlier prediction of just shy of 1.9 million units made at the end of last year under the assumption that the product would average a $600 price tag.
"We have measured enthusiasm for the device's first year (2010), but we expect 2011 to be a breakout year for the iPad adding $4.6b (7.5%) to revenue in 2011," Munster said. "The iPad business may take one year to solidify, but we see*it as an investable theme for shareholders given its impact on 2011."
Still, Munster believes his first-year figures may come in at the lower end of Wall Street's consensus estimates, which are expected in the 4 to 5 million unit range. However, his belief that the iPad is poised to generate Apple an incremental $4.6 billion in sales the following year would equate to a doubling of unit sales to 8 million in 2011.
The analyst, who was in attendance for Apple's hands-on session with the iPad shortly after its announcement, also took pause to assess the iPad's potential to eat into sales of it's much smaller cousin, the iPod touch. While he doesn't see the tablet affecting sales of Macs, he trimmed his 2010 iPod touch unit sales estimate by roughly 1.8 million units to 20.6 million.
"After using the iPad, we believe it will cannibalize iPod touch sales, but not Mac sales," Munster said. "The gadget is a premium mobile device, not a computer; as such, we see some iPod touch buyers stepping up to the iPad, but consumers looking for an affordable portable computer will likely stick with the MacBook lineup."
The analyst maintained his "Overweight" rating and $280 price target on shares of Apple.
In a research report to clients, Piper Jaffray analyst Gene Munster said the iPad's $499 entry-level pricing now leads him to believe Apple will sell between 3 and 4 million of the devices in its first 12 months on the market. That's up from his earlier prediction of just shy of 1.9 million units made at the end of last year under the assumption that the product would average a $600 price tag.
"We have measured enthusiasm for the device's first year (2010), but we expect 2011 to be a breakout year for the iPad adding $4.6b (7.5%) to revenue in 2011," Munster said. "The iPad business may take one year to solidify, but we see*it as an investable theme for shareholders given its impact on 2011."
Still, Munster believes his first-year figures may come in at the lower end of Wall Street's consensus estimates, which are expected in the 4 to 5 million unit range. However, his belief that the iPad is poised to generate Apple an incremental $4.6 billion in sales the following year would equate to a doubling of unit sales to 8 million in 2011.
The analyst, who was in attendance for Apple's hands-on session with the iPad shortly after its announcement, also took pause to assess the iPad's potential to eat into sales of it's much smaller cousin, the iPod touch. While he doesn't see the tablet affecting sales of Macs, he trimmed his 2010 iPod touch unit sales estimate by roughly 1.8 million units to 20.6 million.
"After using the iPad, we believe it will cannibalize iPod touch sales, but not Mac sales," Munster said. "The gadget is a premium mobile device, not a computer; as such, we see some iPod touch buyers stepping up to the iPad, but consumers looking for an affordable portable computer will likely stick with the MacBook lineup."
The analyst maintained his "Overweight" rating and $280 price target on shares of Apple.
Comments
"It is much smaller cousin"? What the heck does THAT mean?
"The analyst . . . took pause to assess the iPad's potential to eat into sales of it's [sic] much smaller cousin, the iPod touch."
"It is much smaller cousin"? What the heck does THAT mean?
"much smaller" = not as large as
"cousin" = related
Not really that complicated, and quite accurate.
That's a fair assessment by Munster. Like I said before, iPad will "find it's own level" as a product. To me, this product is aimed at the aging Baby Boomer generation. It should enable traditional consumers of books and magazines to take an eco-friendly stance and it should enable 90% of most tasks needed by travelers on iPad. It's a smart product for what it offers, but I maintain that both iPod touch and iPad need to have built-in GPS.
Claiming an Eco-Friendly stance with an electronic device is an oxymoron.
I see what Apple is doing now, they are pinching the MacBook Pro on every side, trying to get people to trade down in features.
On one side it's the MacBook Air and on the other is now the iPad.
And if this anal-ist doesn't think this will eat into Mac sales, he's wrong. A lot of typical consumers are ignorant and just buy the cheapest thing without doing any research.
$499 verses a $1999 MacBook Pro. "Internet and email, that's all I use a computer for!"
I don't have a iPod Touch as the storage is too small for my needs, but can it surf the internet without first being hooked up to a computer?
How about setting up a iTunes account?
I'm stunned at how underwhelmed I am with this product. It doesn't appear to do anything that a touch or iphone can't do other than the chopped down iWork suite.
What did you want to do with it?
are expected in the 4 to 5 million unit range.
4 to 8 million suckers. I honestly can't see why anyone would buy this.
Is Apple on the verge of jumping the Shark? This is it? An over-hyped, under-featured (for a tablet, if that is what this is), enlarged iPhone. This iPad iSucks.
1. no multitasking.
2. no camera/video chat.
3. Can you write on it? Does it have voice/handwriting recognition? Any new/better input method?
4. Can't run any real apps on it (if the iPhone OS is the future, count me out Apple. I'll stick with the traditional Mac OS , thank you).
etc, etc, etc.....
I'm stunned at how underwhelmed I am with this product. It doesn't appear to do anything that a touch or iphone can't do other than the chopped down iWork suite.
It might not be for everybody, but it does meld an interesting combination of Netbook and E-Book reader functionality. I'm hoping that it will end up being something I can use in meetings in lieu of my folio. Business applications for an effective device like this really haven't been talked about; it's a lot like Plastic Logic's attempt at a large device... for half the cost and more functionality.
At my office, it would hopefully help reduce clutter on the desk a bit as the purpose of many print-outs is for meetings not at the desk. The little cover case thing that acts as a stand would help with the bias on people that bring laptops to meetings (effectively to play solitaire).
A camera would have been nice, but you should still be able to pull off VOIP. I would also guess that multi-tasking could happen later... hopefully before too long.
The analyst, who was in attendance for Apple's hands-on session with the iPad shortly after its announcement, also took pause to assess the iPad's potential to eat into sales of it's much smaller cousin, the iPod touch. While he doesn't see the tablet affecting sales of Macs, he trimmed his 2010 iPod touch unit sales estimate by roughly 1.8 million units to 20.6 million.
But what impact might this have on the sales of say the iPod Nano? I can imagine my device lineup now being having an iPad and a Nano, whereas at the moment I have an iPod Touch.
I'll stick with my MacBook Pro, you just can't go wrong to a lot of choice, power, storage, removable battery and upgrade-ability. And it already comes with a bigger screen and built in keyboard.
I see what Apple is doing now, they are pinching the MacBook Pro on every side, trying to get people to trade down in features.
On one side it's the MacBook Air and on the other is now the iPad.
And if this anal-ist doesn't think this will eat into Mac sales, he's wrong. A lot of typical consumers are ignorant and just buy the cheapest thing without doing any research.
$499 verses a $1999 MacBook Pro. "Internet and email, that's all I use a computer for!"
I don't have a iPod Touch as the storage is too small for my needs, but can it surf the internet without first being hooked up to a computer?
How about setting up a iTunes account?
That is a crazy statement. They have NO desire for people to trade down - they want people to buy both. If you can afford $2-3K for a MBP, you can also buy an iPad for $600. It doesn't replace an MBP except for the most basic tasks which if that is all you do, you don't need an MBP. The iPad will be a vastly superior couch, plane, holiday experience for all media consumption and the MBP will still be better at all forms of content creation.. if you need to do the latter, buy an MBP, if you want the best of both worlds, buy both.
I do stand slightly corrected for the kid below who will buy one instead of an MBP - there's always one!!
4 to 8 million suckers. I honestly can't see why anyone would buy this.
iCal'd.
We'll see you in a year, starting in April.
I wonder just how many shades of red your face will be.
4 to 8 million suckers. I honestly can't see why anyone would buy this.
Is Apple on the verge of jumping the Shark? This is it? An over-hyped, under-featured (for a tablet, if that is what this is), enlarged iPhone. This iPad iSucks.
1. no multitasking.
2. no camera/video chat.
3. Can you write on it? Does it have voice/handwriting recognition? Any new/better input method?
4. Can't run any real apps on it (if the iPhone OS is the future, count me out Apple. I'll stick with the traditional Mac OS , thank you).
etc, etc, etc.....
FAIL
1) It will come (probably with 4.0) but there is strong empirical proof that no-one cares aside from a bunch of cheap geeks - hasn't held back the iPhone or made Android
2) ichat camera would be nice but most won't care at all
3) This is obviously for consumption much more than production - there are far more consumers than producers of content
4) this doesn't replace a laptop - you have both or whichever fits your needs
The tablet revolution neither requires your participation nor approval
What did you want to do with it?
I would like it to multi task. They are saying that this is/should replace a laptop yet I can't talk on skype, read my email, and surf the web. Strange, don't you think?
A built in camera would have been nice to start with. I think I saw that they have an add on that plugs into the 30 pin connector, but thats just another item to carry around, blah......
I have a couple other gripes, the bezel is very large. I realize that you need a bezel to hold the device but it seems very large to me.
***** Edit
I meant netbook, not laptop....
Claiming an Eco-Friendly stance with an electronic device is an oxymoron.
You really need to inform yourself better before making sweeping, snarky statements like that: http://www.apple.com/environment/complete-lifecycle/
You really need to inform yourself better before making sweeping, snarky statements like that: http://www.apple.com/environment/complete-lifecycle/
Snarky? GFY
I would like it to multi task. They are saying that this is/should replace a laptop yet I can't talk on skype, read my email, and surf the web. Strange, don't you think?
A built in camera would have been nice to start with. I think I saw that they have an add on that plugs into the 30 pin connector, but thats just another item to carry around, blah......
I have a couple other gripes, the bezel is very large. I realize that you need a bezel to hold the device but it seems very large to me.
They never said or implied it replaced a laptop overall. They said is was better than a laptop and a smartphone at the things is is better at... and obviously inferior to them in other things. The only people who will replace a real laptop with this are people who never needed a laptop in the first place.
I agree, Multi-tasking would be nice without replacing a laptop but probably kill battery life. I'm sure it will come, probably with 4.0 but I won't miss it much til then.
That's a fair assessment by Munster. Like I said before, iPad will "find it's own level" as a product. To me, this product is aimed at the aging Baby Boomer generation. It should enable traditional consumers of books and magazines to take an eco-friendly stance and it should enable 90% of most tasks needed by travelers on iPad. It's a smart product for what it offers, but I maintain that both iPod touch and iPad need to have built-in GPS.
Great point about eco-friendly...in July I will be canceling home delivery of the AZ Republic, the paper edition of the Wall Street Journal, Time magazine, Sail, Runner's World, AZ Highways, MacWorld, Foreign Affairs, Flight Journal, Soaring, Tennis, Golf and Playboy. And get the 'Paid' online versions!
All these guys do is cut down trees, print there product with toxic ink, 'truck' around to grocery stores using Mid-East oil, wait 3 weeks and pick up 99% of it that hasn't sold and 'truck' it to the land-fill! What a great business model! Sheez!
So often I sit in the living room or in a plane with my MacBook on my lap, annoyed at the clumsyness, the hot laptop body, and, on an airplane, the inability to open the darn think far enough to actually read the screen when I am not in an exit row, business or first class.
It is interesting to to see the high level of criticism of so many Apple announcements, and how little they correlate with the success of the product. Remember iPod nano (complaints about price), iPod shuffle (initially thought of as just laime), the various iMacs, but esp the 'lampshade iMac' (really bad reviews due to it's odd shape), etc.
I have high hopes, and I think it is to the eReaders and Tablet laptops what the iPod is to other mp3 players ('Zune' anyone?, or remember those things form 2001 when the first iPod cameout)....
Can't wait to get mine!