Is Apple Developing a $700 Touch-Screen Tablet?

While there is no potential for an Apple netbook, the company does appear to be working on a 7- to 10-inch touch-screen tablet device for the first half of 2010, according to a new report.
In a May 21 research note from firm Piper Jaffray, analysts write that Apple has said it’s not interested in a netbook, which would not distinguish it enough from the competition and would eat away at MacBook sales. Instead, they expect Apple to leverage its multi-touch patents and deliver a touch-screen tablet device.
“We expect Apple to fill the gap between the iPod Touch and the MacBook with a new tablet device (not a netbook) priced at about $500-$700,” Gene Munster, the lead analyst, wrote in the report.

“We are anticipating a new category of Apple products with an operating system more robust than the iPhone’s but optimized for multitouch, unlike Mac OS X. The device’s OS could bear a close resemblance to Apple’s mobile OS and run App Store apps, or it could be a modified version of Mac OS X.”

The report emphasizes that Apple believes that software is the key to success in the mobile device category, as evidenced by the App Store being at the heart of its mobile operating system.
“With a larger tablet device in Apple’s lineup, the company could begin selling digital books on its iTunes Store, for use on the tablet as an eBook reader,” according to the report. “In this way, Apple could respond to the tangential competition from Amazon’s Kindle and Kindle DX.”
The report notes that Apple launched its first iPod three years after the first portable MP3 player arrived. Additionally, the iPhone hit the market five years after the first BlackBerry with e-mail and phone capabilities.
Likewise, Munster writes, “We believe Apple is observing the netbook market in a similar way, and will eventually enter with a tablet, a premium mobile computing device.”
Apple, clearly, is familiar with subsidy pricing, through its iPhone arrangement with AT&T, and reported talks with Verizon.
The report adds that Apple could “include an integrated mobile data feature such as 3Gwireless into the device and partner with AT&T or Verizon to subsidize the device together with a contract for a wireless data plan.”
A party with potential knowledge of the tablet is not being revealed, as the analysts at one point state: “We expect the development of such an OS to be underway currently, but its complexity, along with our conversations with a key company in the mobile space, leads us to believe it will not launch until CY10.”