Apple to launch tablet in spring 2010 - analyst

Wed Dec 9, 2009 1:15pm EST

* Oppenheimer says tablet production to ramp up in Feb.

* Expects tablet to add 25-38 cents to EPS per quarter

* Says Apple offering book publishers 70 pct revenue share

* Apple shares up 1.6 pct

SAN FRANCISCO, Dec 9 (Reuters) - Apple Inc (AAPL.O) is preparing to launch a tablet personal computer in late March or April, with manufacturer partners poised to roll out as many as 1 million units per month, according to an Oppenheimer research note.

The highly anticipated tablet is expected to pitch Apple into the digital book market popularized by Amazon.com's (AMZN.O) Kindle e-reader. Apple declined to comment.

Oppenheimer analyst Yair Reiner said the new tablet could boost Apple's earnings per share by 25 cents to 38 cents per quarter, assuming that it sells 1 million to 1.5 million units each quarter at an average price of $1,000 and a corporate average net income margin of 22 percent.

"Our checks into Apple's supply chain indicate that the manufacturing cogs for the tablet are creaking into action and should begin to hit a mass market stride in February," Reiner wrote.

"The February ramp schedule suggests a late March or April commercial release, since Apple will need to build at least 5-6 weeks of inventory before going live."

He said the tablet will have a 10.1-inch multitouch LCD screen similar to that of Apple's iPhone.

Apple has also approached book publishers to distribute their content electronically, and has offered them a revenue cut of 70 percent without requiring exclusivity, Reiner said.

He said that compares favorably to the Kindle's 50 percent deal, and that Kindle only offers a 70 percent cut to publishers that give Amazon exclusive rights.

"As innovative as it is, we believe the Kindle has disgruntled the publishing industry (book, newspaper, and magazine) by demanding exclusivity, disallowing advertising, and demanding a wolfish cut of revenue," Reiner wrote. "The tablet is set to change that."

Reiner forecast Apple's fiscal 2010 profit at $8.39 per share, compared with $6.29 in fiscal 2009, saying his estimate has not yet factored in the new device.

Shares of Apple were up 1.6 percent at $192.89 on Nasdaq.

(Reporting by Gabriel Madway and Tiffany Wu; Editing by Richard Chang)

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Comments (2)
innomind wrote:
I hope it will have an AMOLED screen and the pen drawing option like the Wacom Cintiq.

Renat Zarbailov
Innomind.org

Dec 09, 2009 2:04pm EST  --  Report as abuse
captbilly wrote:
Could someone please explain to me why Apple’s tablet will be any better than the many tablets that have come before? All of them were compact, had handwriting recognition and finger pointing capability, but nobody liked the lack of a real keyboard. So why is Apple’s tablet highly anticipated (as stated by the article) but all the others had only a very minor impact on the market?

I guess what gets me is that whenever Apple does something they get endless free advertising that helps make their products succeed where other similar, or even better products fail for lack of this massive free PR. If I had a company that could simply anounce that it was comming out with a new product and then would get billions in free coverage by the media, I could make way more money than Apple does. Does anyone remember that Apple did not come up with the MP3 player, or that the Ipod was never the best. There had been very good and easy to use MP3 players around for years before Apple figured out a way to actually charge all the users of their MP3 players for their music (something that none of the competitors ever dared to do). But the media fell in love with Apple’s Itunes, why?

Dec 09, 2009 2:41pm EST  --  Report as abuse
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