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Apple will release its tablet PC in late March or April, Oppenheimer & Co. financial analyst Yair Reiner suggested in a Dec. 8 research note sent to investors, and will include a 10.1-inch touch screen.
“It appears Apple will begin ramping production in earnest in February, implying that the tablet could launch in late March or April (barring production hiccups),” Reiner said in the report. “Our checks also suggest that the tablet’s display will be a 10.1-inch LTPS based LCD screen, not an OLED display as some have suggested.”
Furthermore, Reiner suggests, “the manufacturing cogs for the tablet are creating into action” and Apple “appears to be sizing its supply chain to support production of as many as 1 [million] units per month.” By late March or April, he adds, Apple would have the five or six weeks of inventory needed to launch the device.
Reiner’s unnamed U.S. sources also apparently told him that “Apple is approaching book publishers with a very attractive proposal for distributing their content.” Allegedly, Apple’s revenue split with publishers will be 30/70 and will not be restricted by exclusivity.
From there, Reiner suggests that an Apple tablet would have a negative effect on Amazon.com’s Kindle e-reader. “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.” The tablet, he says, “is set to change that. It should also make ebooks more relevant for education by simplifying functions such as scribbling marginalia.”
E-readers from Amazon.com, Barnes & Noble and other manufacturers have been experiencing a robust holiday season, with Amazon.com claiming high sales numbers and Barnes & Noble insisting that shipments of its own e-reader, the Nook, are delayed due to demand.
Oppenheimer does business with the companies described in its research reports, and states that it could have a conflict of interest that could affect the objectivity of said reports. “Investors should consider this report as only a single factor in making their investment decision,” reads the boilerplate on the first page of Reiner’s note.
In lieu of official confirmation from Apple, which thus far has refused to confirm or deny the development of a tablet PC, all analyst suggestions should be taken with a proverbial grain of salt. Other analysts’ hypotheses correlate with Reiner’s, but their ideas about form factor and other details are also extraordinarily broad: For example, both Piper Jaffray analyst Gene Munster and RBC Capital Markets analyst Mike Abramsky have suggested a device with a touch screen ranging between 7 and 10 inches, with 3G connectivity.
But different analysts have voiced differing opinions about other aspects of the potential device. Munster, in his analysis, posited that the tablet PC will retail for somewhere in the $500-$700 range and sell 2 million units in its first year of release.
By contrast, Reiner suggests a tablet retail price of $1,000.
Whatever the case, Apple is likely devoting resources for a product push in 2010. In an October 10-K filing with the SEC, Apple indicated that it plans on allocating $1.9 billion for “capital asset purchases during 2010,” including “approximately $1.5 billion for corporate facilities, infrastructure, and product tooling and manufacturing process equipment.” By contrast, the company spent around $1.5 billion for capital asset purchases in 2009, including $1.1 billion on corporate facilities and infrastructure.
Apple has also filed a number of patent applications throughout 2009 for technologies that could be integrated into a tablet. One application, filed in June, described a device that could be manipulated not only with the fingers of both hands, but also palms-in theory, allowing for a broader range of activities such as drawing. The underlying electronics described in that patent would allow the device to sense various hand configurations, offer an ergonomic surface that adjusted to different hand sizes and offer feedback.
According to an August article in The Wall Street Journal, which cites unnamed sources, Apple CEO Steve Jobs has been focusing a lion’s share of his attention on the device. Jobs later e-mailed the Journal to state, “Most of your information is incorrect” in terms of the story.
Denials from Apple and Jobs, however, have not managed to tamp the rampant speculation from the media and analysts.
