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Expect a Smaller, $300 iPad & AAPL Stock at $1,000

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If analysts are right, Apple will make a smaller iPad in the next few years, priced at $300 or less. Combined with the iPad ad iPhone strategy we may also see AAPL stock hit $1,000 in the near future.

A 7 inch iPad with a cheaper price isn’t a new rumor, but according to Gene Munster, a Piper Jaffray analyst who studies Apple’s moves and the tablet market, it still makes sense.

Munster doesn’t delve into the screen size of the cheaper iPad in an update to investors this morning, but we have heard of a 5-inch iPad, a 7 to 8-inch iPad in the past few months.

Apple(Read: Why a Smaller iPad Makes Sense)

However, Munster does name a price for the smaller tablet, “below $300,” which would put it in the ballpark of The Kindle Fire and Nook Tablet. Consumers are much more likely to jump to an iPad for a $100 price difference than a $300 price difference.

Business Insider shares portions of Munster’s report, including the following statement about the smaller, cheaper iPad.

The reason we expect growth/share to accelerate in CY15 is that we believe the iPad will become more widespread as both an enterprise and education device. We believe enterprises and education institution adoption will be driven by employee and student pull for the device. In conjunction with our iPad unit growth totals, we assume ASPs on the device will decrease ~5% per year over the next four years given the strategy of selling past generation iPads at $399 and a smaller screen iPad below $300

Additionally, Munster is on the record as believing that AAPL stock could hit $1,000 thanks to incredible iPhone sales numbers and a 60% tablet market share.

Officially Piper Jaffray upped the target price for AAPL stock to $910, but Munster believes we will see Apple stock hit $1,000 a share by calendar year 2014, putting Apple’s market cap at $1 trillion.

Would you rather buy Apple stock or a smaller iPad?

Josh Smith is Editor of GottaBeMobile and Notebooks.com. He's always looking for ways to help you get the most of your gear and loves to talk about tech on radio and TV. Josh uses an iOS and Android devices as well as Mac and Windows Computers. Josh Smith on Google+ Email: [email protected]

5 Comments

  1. Sophie Branton

    04/03/2012 at 1:10 pm

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  2. adelaw61

    04/05/2012 at 10:32 am

    Apple stock price is worth every penny, that’s if you are smoking the right stuff.
    The insanity of the speculative markets continue to be cheered by deceptive advocates who have made fortune but don’t acknowledge the actually cost to the United States future which is likely to see a declining standards of living for years to come. This is all done for a cause, so that a handful of people can make their billions by manipulating the stock market to show an illusion of prosperity returning to the economy. 
    The analyst which are projecting Apple stock to reach $1000 a share are the likely the same expletive, which made though wonderful forecasts about similar bubble stocks during dot com bust.  I would have like to use the actual word which best describe these analysts, but I probably would have been censored.
     
    I don’t know what dope the herd is smoking, but it must be good. 
     
    If apple stock price continues to increase, don’t jump for joy.   The continually rise is it share price is just an example of herd investing as there are no other alternative.  Apple stock price has nothing to do with fundamentals and can be attributed to the manipulation by institutional investors which have created another bubble.  As long as the herd believes the fairytales in regards to apple growth and income potential the stock will increase.   As soon is its net income and growth don’t meet the ridiculous expectations it will drop.  
     
    FACTS or FACTS.
    Apples net income will stagnate.  It is likely apples net income will not exceed 40 billion in 2012.  Apples 2011 income was approximately 26 billion.   A 14 billion increase in net income is a significant change and is not likely to happen.  What is apple margin on it products and how much additional gross income does it required to realize 14 billion increase in net income?    Every additional billion of net income will be more difficult to earn just due to is size which is 1000 million.  140,000 million buys quite a few Ipads, downloads and other apple products.      
    By comparison NASA Space Shuttle operating budget in it last year was 3 billion.   I provide this to illustration, to give the cheerleaders a clued about the staggering amount of income apple currently has.
    Apple net income is rarely mentioned.  Apples net income from the past five years, from 2007 to 2011 is approximately 56.5 billion.  A major jump in sale and income came in 2010 to 2011 when its net income increased by 11.91 billion.
    What is never asked is how a company with a net income of 25.92 billion in 2011 can have achieved capitalization of 565.9 billion, maybe though speculation.   Could that be possible?
    It is relatively easy to determine apple value utilizing its net income and a capitalization rate.  Apple average net income over the last 5 years is 11.3 billion.   This income average would typically be utilized to estimate a value.  But let use an unlikely scenario that Apple net income in 2012 is 40 billion.  If a generous capitalization rate of 10% is used Apple’s value can be estimated by:
     
                                                               40 billion / 10% = 400 billion.
    But to entertain all the promoter of apple stock let utilize a capitalization rate of 6%
                                                            40 billion / 6% = 666 billion.
    I did not calculate that number on purpose.  However it is interest.  Maybe, apple stock price is associated with one of the deadly sins – GREED.   It certainly appears to be.
    Apple’s unsustainable income growth is beginning to slow, but this does not stop the analysts from developing deceptive forecast about Apples future growth citing its relatively low market share of worldwide computer, Smartphone and Tablet sales.
    One must ask who is paying these analysts for these deceptive forecasts.  Could it be the herd on Wall Street which severely damaged the US Economy by all the financial instruments which were developed, supposably to limit risk, but were merely another device which allows them to hedge their bets.   This explain why, brokers, traders and hedge mangers can’t make an honest living without rigging the system in their favor.   
    It’s not surprised that the 70% of Apple’s stock is owned by institutional investors which have created another bubble as there are limited investment alternatives.   Apple stock was primed for this collusion, due to it past growth and the difficulty in evaluating its most important characteristic which is the marketing of its products.
    Marketing  is an intangible asset, akin to Goodwill which is very difficult to evaluate    There is a reason,  Apple’s sales  are less than its competitor and that is due to their products considerably higher cost, which in many cases are functionality no better than their competitors.    But if you listen to the experts it’s like Apple has no competitors are competing products which the consumer can choose, but can only buy apple brand.        
    I have several apple products, including a ipad which is nothing more than a oversize iphone.  The Ipad functionality and interface are significantly inferior to a lap top.  The appeal must be to the herd, which is high something and give them a convenient place to watch video as its utility is more a like a toy than a useful device.
     I could go on about why apple stock is a bubble, but it would be in vain as the herd does not wish to sober up as the dope apple selling is that good.  Maybe I need a toke.

    • Manolive

      04/07/2012 at 1:20 am

      see note below

  3. Manolive

    04/07/2012 at 1:17 am

    I just started investing for the first time last September. I sunk a ton of money into gold, right at the very peak. I was down over $30,000 almost immediately. What a nice way to be greeted as a new investor. Thank god I also bought 200 share of aapl, when it was $420.00 a share. Apple single handedly rescued my portfolio from the gold debacle. All I know is I’ve bought and sold Apple for the past 6 months, and am $69,000 ahead because of it. My balance went up $16,000 in the last 4 days alone. You bears can sit on the sideline all you want, and lose thousands in the process. You’ve been beating the same doomsday drum since the stock was $200, $300, $400, $500, and $600 a share. look it up. Apple bears are NEVER right. You keep sitting on the sideline, and I’ll keep making all the money ($36,000 in the last month alone.) It’s nice to know us “herd” people, as you call us, can still make a few bucks on this lousy stock.

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