Analyst: Apple Could Sell 5M Tablets in First Year
10:08 am, January 25th, 2010, Ed Sutherland
Taking a page from the old fairy tale, an analyst said Apple’s tablet could hit it out of the park if it picks a price that is just right – say $600. If Apple comes up with a price neither too high nor a niche product, Apple could sell 5 million tablets, bringing in $2.8 billion its first year.
“Pricing is key,” according to RBC Capital Markets analyst Mike Abramsky. The analyst told investors the best case scenario is the tablet threads the middle, avoiding both the crunch of record demand (like the iPhone), and being labeled a niche product (like the MacBook Air).
If Apple prices its tablet at $1,000, demand shrinks, requiring the company to draft carrier-subsidies and wide distribution akin to the iPhone. However, at $500 to $799 (or $200 to $300 subsidized), “significant demand exists” and the device “strikes squarely at hear of the entry level laptop and Netbook markets,” Abramsky said.
The analyst also estimates a tablet could grab two to five percent of the Mac or iPod touch sales, but the impact could be minimized if the new device doesn’t include Mac OS X compatibility or Windows emulation. The tablet could use the iPhone OS, according to reports.
Abramsky’s comments appear in line with other experts. Consumers are unwilling to pay more than $700 for a tablet, a research firm announced Friday. Seven in 10 people surveyed by Retrovo said they would not spend more than that amount. ChangeWave Research also found 70 percent of people willing to pay $500 for a tablet, with only 37 percent saying they would pay more than $700. Earlier this month, the Wall Street Journal reported the tablet could cost $1,000.
[Via All Things Digital, CNET]
Posted by Ed Sutherland in News | Comment on this article
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Thanks for reporting this, Ed.
I must admit though, I do find these analysts to be, well … er, … full of it.
I mean, let’s look at this critically: an analyst has decided to make these predictions based upon a product that he has never seen or touched, knows nothing about except rumor and speculation, nor has talked to anyone else with any further information.
Amazing!
“… an analyst said Apple’s tablet could hit it out of the park if it picks a price that is just right …”
Er, so if the price is too high, then less people will buy it. No, really? Gosh, how glad we are that we have professional analysts to tell us this stuff.
“… The analyst told investors the best case scenario is the tablet threads the middle, avoiding both the crunch of record demand (like the iPhone), and being labeled a niche product (like the MacBook Air)….”
Wow, so it shouldn’t be too cheap or too expensive. Gosh, what amazing insight.
“…If Apple prices its tablet at $1,000, demand shrinks, …”
Really? I bet if they priced it at $100,000, then demand would shrink also. Mind you, I’m not a professional analyst, so I think I’ll leave that sort of thinking up to the ‘experts’.
“… The analyst also estimates a tablet could grab two to five percent of the Mac or iPod touch sales, …”
and the evidence for these numbers are where …? Oh yes — haha — how silly of me, they’re somewhere up the analyst’s ass.
“….Abramsky’s comments appear in line with other experts.”
Experts? What experts? Ah! You mean the other people who also have absolutely no solid facts about an unreleased product, that they also have never touched or seen. I guess that makes me an expert on aliens from the planet X.
Ooh look at me, I’m an expert.
“… Consumers are unwilling to pay more than $700 for a tablet, a research firm announced Friday. Seven in 10 people surveyed by Retrovo said they would not spend more than that amount.”
Wow — I can just imagine this high quality “research” from this “research firm”! Perhaps it would go something like this:
(telephone rings)
Householder: “Hello?”
Caller: “Yes hello, sir, we’d like to ask you if you how much you would pay for a tablet computer you have never seen, touched, and know nothing about, have no idea how easy or difficult it is to use, have no idea how long the battery lasts, nor what it will look like. How much would you pay?”
Householder: “Oh no more than $700 definitely!”
Caller: “Thank you, you’ve been very helpful. Goodbye.”
(call ends)
Analysts would do well to stick to analyzing things that can been seen, not analyzing hot air and rumor. And “research” firms should likewise stick to researching things that are real, and can be seen and touched, not researching wild speculations, imagination, and guesswork.
Alfred, on January 25th, 2010 at 11:08 am
i agree that too high a price and too niche a product would kill tablet sales.
but define ‘too high’ and define ‘too niche’
some folks say if it is over $500 that’s too high. some folks say that it is unacceptable to force 3g service on folks, even unlocked and both CDMA and GSM cause that adds an easy $360 a year to the price.
Some folks say that $700-800 would be fine. Some say that would be fine as a subsidized price and $900 as a full price would be ‘okay’
and on the niche front. Several folks have said that it simply must be running the full Mac OS or it is ‘too niche’. Others have said that basically a large ipod touch with cell data, better video and a built in ereader would be a killer tab that would redefine the netbook and eliminate having to carry a netbook, an ipod, an ereader etc. You would save money, reduce ewaste and more. So it wouldn’t be niche at all.
And Alfred you are wrong about the research. It’s worse. Much of the “I wouldn’t pay more than XXX” stuff is coming from blogs posting polls for readers, mags doing the same. One site claims that some 90% of people wouldn’t pay over $700 for the tablet. but then you look closer and ‘people’ is 500 of their subscribers responding. hardly a sound sample of any real population group
Charli, on January 25th, 2010 at 11:51 am
I didn’t say anything. Honest!
chano, on January 25th, 2010 at 1:17 pm
The price for the Apple Tablet may be too high for some,but there will be other cheaper Tablets from other manufacturers with windows and Linux coming soon.
We might see what is happening in the mobile phone market manufacturers trying to emulate the iPhone but failing .
poppa, on January 25th, 2010 at 1:20 pm
… but I can’t resist.
Alfred is too kind in thanking you for this article and blasting the analysts.
A lot of what is said by analysts is nonsense.
However Ed, you were clearly asleep on the job for reporting all their pronouncements as if they were Gospel. Your duty is towards your readers and with your Wall Street smarts, you could have put the analyst bullshit into its proper perspective.
Exactly what value did you add to this topic?
FAIL.
chano, on January 25th, 2010 at 1:23 pm
Hold on my financial guru…….
5M tablets in one year? Say what?
You said 5M in six months – March to September. In your own words elsewhere on CoM …
‘What about the tablet? Apple could sell 5 million units between March and September, priced between $500 and $1,000, the analyst said.’
Which is it Ed?
I need clarification. I’m calling my neighbour’s dog now to check. I need a reliable, knowledgeable source.
chano, on January 25th, 2010 at 1:28 pm
1. This is news? Sometimes less is more guys.
2. People get paid for this kind of stuff. I predict there’s going to be an economic shift that will see some people increase revenue and others lose it. I also predict some form of global change. Now gimme me cheque…
Lame.
WS, on January 25th, 2010 at 4:08 pm
This is going to be a SEISMIC SHIFT in computing. All the Mac rumormongers are SHOVEL READY. We will soon truly know the makeup of Jobs’ CORPORATE DNA. I predict a successful BRANDSTORMING on Apple’s part. This could be the great BAILOUT of the moribund newspaper industry. Or a STIMULUS PACKAGE for Silicon Valley. I predict a very nice touchscreen made of good material…. with a touch of TRANSPARENCY. Already, the DEATH PANEL is debating on the fate of Kindle.
The Great Apple Tablet device of 2010: CHANGE YOU CAN BELIEVE IN!
Mattzook, on January 25th, 2010 at 11:10 pm