Wall Street expects new iPad to continue dominating tablet market
Shortly after Apple unveiled the new iPad, Wall Street analysts weighed in with their opinions of the device. Most are predicting that it will help "cement" Apple's market dominance.
Apple's new iPad features a 2,048-by-1,536 pixel resolution Retina Display, a faster processor, LTE 4G, a 5-megapixel camera and voice dictation. The tablet goes on sale March 16 in 10 countries.
Though the third-generation iPad was largely in line with analysts' expectations leading up to Wednesday's media event, they view the new tablet as a positive for Apple and expect it to help the company widen its lead over its competitors.
Piper Jaffray
Piper Jaffray analyst Gene Munster wrote in a note to investors that the new iPad is a "significant upgrade" to the iPad 2. He expects the device and a new version of iOS will help Apple maintain its lead in the tablet market.
Munster also noted that the lower-priced iPad 2 is "a strong defensive move" in the face of competition from Amazon's Kindle Fire and other budget tablets. The analyst does not expect the older entry-level iPad to cannibalize sales of the new model, noting instead that it will expand "Apple's addressable market in the rapidly growing tablet space."
The investment bank expects Apple will lead the tablet market to outgrow the PC market in the long term. Given the firm's long-term outlook, Munster cautioned that its current near-term estimate of 26 percent year-over-year unit growth may be too conservative. Piper Jaffray's estimate of 450 million tablet sales, including 225 million iPad sales, in 2016 implies an annual growth rate of 40 percent over the next four years.
The firm maintains an Overweight rating for Apple stock with a price target of $670.
UBS
Maynard Um reiterated UBS' Buy rating for Apple and its $550 price target. According to the analyst, the accelerated international launch of the new iPad could "provide upside" to estimates for the March quarter. Apple will launch its third-generation tablet first in 10 countries on March 16 and 25 more countries a week later. The company waited two weeks before going international with last year's iPad 2 launch.
UBS currently expects Apple to ship 12 million iPad units during the March quarter
RBC Capital Markets
Analyst Mike Abramsky said Wednesday he expects the new iPad to "maintain Apple's tablet dominance." According to him, Apple's "powerful ecosystem," which includes iTunes, iTunes Store, iCloud, iOS, App Store, and carrier/store distribution should help drive sales of the device.
RBC continues to expect Apple will ship 62 million iPads during calendar 2012, holding on to a 74 percent share of the tablet market. Abramsky viewed the third-generation iPad as "raising the performance bar" for tablets, since it has the highest-resolution screen on a tablet, a faster processor than the NVIDIA Tegra 3 and 4G LTE.
The analyst added that the cheaper iPad 2 should have a better appeal to price-sensitive buyers. An RBC survey from late last year found that 20 percent of non-iPad buyers were "likely" to purchase a $399 iPad 2.
Deutsche Bank
Chris Whitmore described Apple as "lapping the competition again" with the new iPad. The launch of the device arrived earlier than the analyst originally expected, so he also noted a potential upside in March quarter iPad sales.
Whitmore expressed the belief that Android and Windows tablet competitors will "have trouble matching" the price-performance specs of Apple's current iPad lineup. He expects Apple to "continue to dominate the category." The firm now believes its 60 million iPad estimate for 2012 is "beatable."
Deutsche Bank also believes developers will "flock" to the iPad's raw performance characteristics. A side-by-side comparison of the third-generation iPad and the iPad 2 showed that the new hardware was "particularly impressive" when running graphics intensive applications such as games or video content.
"We expect this upgrade to attract even more developers to the iOS platform (315M+ units shipped) whose new Apps (200K+ and counting) will attract even more users to the platform," he said.
Whitmore viewed the iPad ecosystem as winning out against its rivals. He pointed out that Windows 8 is receiving "mixed reviews" and is not expected until the second half of 2012. According to him, Android is in "disarray," making the iPad's value proposition for developers "abundantly clear."
J.P. Morgan
J.P. Morgan's Mark Moskowitz said the combination of upgrades in the new iPad should "cement Apple's market dominance in a preemptive response" to the flood of Windows 8 tablets later this year. He called the third-generation tablet a "quality" upgrade.
The analyst also marveled at Apple's ability to add LTE without compromising battery life. J.P. Morgan's research shows that battery issues have been an "impediment to broader manufacturing and adoption of 4G LTE-capable devices." As such, he noted Apple has having accomplished an "impressive feat" by dramatically improving iPad specs while maintaining 9-10 hours of battery life.
Moskowitz also said he expects comments from Apple CEO Tim Cook that there is "a lot to look forward to" from Apple in 2012 to stoke speculation about the rumored full-fledged TV offering. In the firm's view, Apple's leadership through innovation "stands to continue" and should drive the company's stock even higher.
Morgan Stanley
Katy Huberty told investors she expects the new iPad to "drive strong demand." The investment bank's model conservatively predicts a 1.2x unit increase in iPad shipments over the next four quarters as compared to the prior four. A 2.3x increase in iPad shipments occurred after the iPad 2 was introduced last year.
If the iPad were to continue growing at the 2.3x rate, Apple could ship as many as 90 million iPads this year. The firm currently expects shipments of 51 million units during 2012.
Morgan Stanley characterized Apple's price cut on the iPad 2 as an important move to "expand its addressable market and grow profit dollars." An earlier survey by the firm showed that Apple could stimulate 15-20 million incremental U.S. unit demand and 38 million global demand by lowering the iPad 2 price by $100. According to Huberty, each incremental one million iPads could add $0.20 of earnings per share.
The analyst does not expect the iPad 2 discount to affect Apple's gross margins. She estimates Apple has negotiated 20 percent annual component cost decreases from suppliers. Assuming a 30 percent shipment mix of cheaper iPads, the gross margin of the iPad would deteriorate by just half a point, Huberty noted.
[ View article on AppleInsider ]
Comments
I'm waiting for Win8 to challenge the iPad.
Thanks Captain Obvious aka Wall Street analyst.
The truth is that the new iPad will dominate like a motherfucker!
This is also good news for AAPL, and for those who are smart enough to hold that stock, because Apple is on a damn roll! And things are looking mighty good for 2012. I wonder if Apple is going to release preorder numbers soon? I expect them to be massive. I'm just happy that I managed to order one today, and I won't have to be standing in any ridiculous line come next week.
iPad 2 still expected to dominate tablet market. In other news, rain still expected to be wet.
Lol!
I was typing the same thing as you.
Great minds think a alike!
I would've been 2nd post... if it weren't for those meddling kids!
I don't know guys, that Asus thingy has a docking station... Apple better watch out.
Yeah, the same people who like that tablet are probably the same clueless and backwards people who wish that they could use a mouse with their tablet.
Some people just don't get it, but that's ok. I suppose that It's good that options exist for such people. On a technological level, those people have the mindset of a neanderthal.
I'm waiting for Win8 to challenge the iPad.
There are some really good things about Win8 and Metro for a touchscreen, but like WP7 it's not good enough, soon enough. In fact, the gap between iOS for iPad and Win8/Metro is wider than iOS for iPhone and WP7.5 and MS is still losing marketshare according to the last comScore.
I would've been 2nd post... if it weren't for those darn meddling kids!
You sound like every Scooby Doo villian.
I don't know guys, that Asus thingy has a docking station... Apple better watch out.
Does Asus have a phone that fits into a notebook dock that fits into a keybaord dock?
Jeez, there are so many clueless and dumb people on the internet. I've been reading some comments today on various sites, and certain people never learn. Some people, apparently born with underdeveloped brains, are calling this a minor upgrade. Others, who were obviously beaten and physically abused when they were children, are calling this an iPad 2S.
The truth is that the new iPad will dominate like a motherfucker!
This is also good news for AAPL, and for those who are smart enough to hold that stock, because Apple is on a damn roll! And things are looking mighty good for 2012. I wonder if Apple is going to release preorder numbers soon? I expect them to be massive. I'm just happy that I managed to order one today, and I won't have to be standing in any ridiculous line come next week.
You see, if you would have said that colorful Mother Fuxxxx word in Mac Rumors they would ban you. Of course Mac Rumors is a pro communist organization.
And don't tell me underneath dust on store shelves.
I hadn't realized that there were over a 100 different android tablets released last year. Where are they hiding?
And don't tell me underneath dust on store shelves.
Okay we won't tell you . . .
Where are they hiding?
And don't tell me underneath dust on store shelves.
Don't be ridiculous... they're still in boxes at the warehouse. Stores don't want 'em.
Don't be ridiculous... they're still in boxes at the warehouse. Stores don't want 'em.
That's funny. I remember reading a review of the PlayBook were the guy had literally planned to fly to Canada to return the review unit because RIM had no interest in getting it back. For 3 weeks they ignored his calls and emails. It wasn't until he threatened to kill himself, did they recover the unit...
Jeez, there are so many clueless and dumb people on the internet. I've been reading some comments today on various sites, and certain people never learn. Some people, apparently born with underdeveloped brains, are calling this a minor upgrade.
The New York TImes, still smarting from being ignored by Apple, treated the news like it was a minor improvement bump.
Android Tablets are soooooo lame. It seems that the tablet industry out side of Apple just doesn't get it. I think the only one that comes close is Samsung. Yet they cant keep up and innovate like Apple can. Samsung copies most of Apples iPad ideas. The iPad 3 will keep the the others way behind. LOL.
It's because most Android manufacturers make tablets as an afterthought. Samsung put way more effort into the Galaxy Note (5.3" phone) than any tablet. And large screened phones cannibalize most potential tablet sales. I personally have a 4.3" Android phone, why would I want an Android tablet with inferior specs and the same capabilities, especially when the 4.3" screen satisfies my craving for a larger device. A Galaxy Note is a tablet and a phone, so that's only 1 sale instead of a potential for 2 sales.
The iPad dominates because a 3.5" device is too small to use all the time, and because Apple puts alot of effort into making the iPad a great device to use. Apple executes perfectly the balance between making each device (phone, tablet, computer) useful on it's own, but just limited enough, but also integrated enough to encourage the buying of all 3 devices.
Asus is making IMO the only Android tablet that's interesting, but more to the technophile types. The Asus Padphone is incredibly innovative and interesting, but because it's a phone-tablet-laptop in one, has limited sales potential and will cannibalize sales of every category.
It's because most Android manufacturers make tablets as an afterthought. Samsung put way more effort into the Galaxy Note (5.3" phone) than any tablet. And large screened phones cannibalize most potential tablet sales. I personally have a 4.3" Android phone, why would I want an Android tablet with inferior specs and the same capabilities, especially when the 4.3" screen satisfies my craving for a larger device. A Galaxy Note is a tablet and a phone, so that's only 1 sale instead of a potential for 2 sales.
The iPad dominates because a 3.5" device is too small to use all the time, and because Apple puts alot of effort into making the iPad a great device to use. Apple executes perfectly the balance between making each device (phone, tablet, computer) useful on it's own, but just limited enough, but also integrated enough to encourage the buying of all 3 devices.
Asus is making IMO the only Android tablet that's interesting, but more to the technophile types. The Asus Padphone is incredibly innovative and interesting, but because it's a phone-tablet-laptop in one, has limited sales potential and will cannibalize sales of every category.
Some interesting thoughts.
For me, anything less than about the iPad's size is of no use as a tablet and would better be thought of as a PDA. Also, I'm one 'technophile' who has no interest at all in Android (although I work with Linux and OS X). Regardless, opinions don't matter much, especially ours. Sales do the talking and profits provide the motivation for future developments and success.
All the best.
Gene Munster thinks Apple will lose nearly half their current market share by 2016 (95% down to 50%) ? Time to let Eddie Munster take over for dad.
DigiTimes is reporting eInk display sourcing are down 65%. While it's hard to take anything they say seriously I can see how eInk could be faltering in favor of tablets the way the PMP market faltered with modern smartphones hitting the market.
I do think Munster is off. Amazon might be able to maintain some marketshare with their $199 tablet but with a $300 10" Kindle Fire the decision to buy it over the iPad will be harder as those could actually be iPad customers. Only time will tell but I think Apple just sealed the deal with the tablet market in only two years.