Saturday, June 15, 2024

Mac ‘iPad’: The Apple Netbook?

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Citing sources from Asia, the Piper Jaffray analyst who has been on top of the rumored Apple tablet device has issued a report with even more details on what could be becoming Apple’s worst-kept secret.

Senior Analyst Gene Munster has written extensively about the tablet device, which some bloggers have taken to calling the “iPad.” In his latest report, issued to clients on Friday, he cited details on the device as well as projections for its financial impact on Apple (NASDAQ: AAPL).

“We are reiterating our thesis that in early CY10, Apple will introduce a touchscreen device similar to an iPod touch but larger,” he said in the note. “Last week, we spoke with an Asian component supplier that has received orders from Apple for a touchscreen device to be fulfilled by late CY09. This data point underscores our thesis that a tablet will likely launch in early CY10.”

This coincides with a story in a Chinese newspaper that three equipment manufacturers — Foxconn, Wintek and Dynapack — have received direct orders from Apple for parts. Foxconn is already Apple’s major design partner, making the iPhone and MacBook. Wintek provides touchscreen panels and Dynapack makes batteries.

Munster’s view of the device is still that it will be a larger version of the iPod Touch, capable of running existing App Store applications as well as a new generation of applications written for the larger-screen device. The tablet-specific software would be the key differentiator between the device and the iPod Touch/iPhone.

He believes the target market would be people who want portability for things like Web surfing, e-mail, and media — i.e., what netbooks do.

“We believe an Apple tablet would be priced 30 percent – 50 percent below the $999 MacBook, and would offer best-in-class Web, e-mail, and media software,” Munster wrote. “In other words, we believe Apple’s tablet would compete well in the netbook category even though it would not be a netbook.”

Munster also believes the device could include a 3G cellular modem and may be subsidized by a carrier — and not just AT&T (NYSE: T).

Instead, Verizon Wireless (NYSE: VZ) could also be in the mix, although Munster admitted that the idea came from reading media reports that indicated Apple and Verizon have been in discussions around a new wireless device.

“These discussions may or may not be centered around a future tablet, but we raise the issue simply to point out that Apple could include an integrated mobile data feature such as 3G wireless into the device and partner with AT&T or Verizon to subsidize the device together with a contract for a wireless data plan,” Munster wrote.

What Apple may or may not be planning with Verizon is open to lots of conjecture. The company has weathered criticism over its relationship with AT&T, stemming from lackluster wireless network performance and the carrier’s inability to immediately support iPhone features like multimedia messaging service (MMS).

On the financial front, Munster estimates that the rumored Apple tablet could ship about two million units after it debuts early next year. Using a median estimated price of $600, that would add about $1.2 billion to Apple’s annual income, about 3 percent of the $40.1 billion Piper Jaffray projects for Apple’s calendar year 2010 revenues.

Spokespeople from Apple did not return requests for comment by press time.

Not everyone agrees with Munster’s assessment of the “iPad” as a netbook competitor, however.

“If you look at netbooks today, as most people see them, they are being marketed as a ‘PC lite,'” said John Jacobs, analyst with NPD Group subsidiary DisplaySearch. “Whereas if you look at the rumors about whatever they call this product, it’s not just a device to get quick access to the Internet but is being positioned to do so much more.”

Instead, the rumored Apple device seems aimed at doing far more, Jacobs told

“Think about an iPod Touch on steroids,” he said.

In addition to applications, Jacobs said e-books could be one area where the Apple table could shine, thanks to its color screen — a feature the current darling of the e-reader space, the Amazon Kindle, lacks.

“Tack on top of that an e-reader, plus magazines,” he said. “You have a true multimedia device.”

And if Apple is going to do something in the space, it’s not going to be narrowly focused. Instead, it will have to be wide-ranging in its application and cover as much ground as possible, Jacobs said.

“If you come out with another ‘me-too’ device, at the end of the day people will say, ‘It’s a $600 netbook — whoppee.'”

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