Apple received more good news from Wall Street, ahead of its expected Oct. 18 quarterly financial report. J.P. Morgan Thursday raised its revenue estimate for the fourth quarter to $18.71 billion, up from $18.13 billion. Despite Apple’s overwhelming success with the iPhone and iPad, the Cupertino, Calif. company has”plenty of growth” left, analyst Mark Moskowitz assured investors.
Indeed, Apple could earn $81.53 billion for fiscal 2011, up from Moskowitz’ previously estimated $78.84 billion. The increasing talk of a CDMA iPhone could add up to $2 per share next year, he estimated. The analyst expects Apple will introduce a CDMA iPhone for Verizon in early 2011 with a version aimed at China by mid-2011.
Apple’s gross margins may soon hit 40 percent, up from the 39.5 percent expected in the September fiscal quarter, according to J.P. Morgan. Falling prices for components and memory should balance the added cost of Apple’s recently-ended free iPhone 4 bumper program and back-to-school educational discounts, according to the analyst.
However, Apple will likely witness even more success with the iPad, despite a growing number of PC companies introducing rival products. “We are skeptical, however, of the competition exhibiting a similar adoption curve as the iPad’s,” Moskowitz said. Unlike smartphones, which require only an app store, “we believe the content (movies and TV shows) is the key to tablet adoption, and here, Apple has the content,” he adds.
The financial house expects the iPad will take 50 percent of netbook sales, but just 5-10 percent of the overall PC market. As for the tablet impacting Mac sales, the analyst views the tablet instead as another “halo” device attracting Mac buyers. The iPad could “drive purchases of Macs as the central command center for content creation and sharing in a household, and then the iPad offers the ultra-portability experience,” Moskowitz says.
J.P. Morgan estimates Apple sold 4.7 million iPads in the recent quarter, higher than a Bernstein Research forecast of 4.5 million sales. Earlier this week, Bernstein Research analyst Colin McGranahan made headlines when he described the iPad as having the fastest adoption of any non-phone electronic device.
Apple will release its quarterly financial numbers Monday, Oct. 18 at 5 p.m. Eastern (2 p.m. Pacific).
[via AppleInsider]
