Device unusually cheap, awaiting real potential

Several financial analysts have issued new comments following Apple's debut of the iPad. A recurring theme is that the tablet is unexpectedly cheap, with a base price of $499 for a 16GB, Wi-Fi-only model. Shaw Wu of Kaufman Bros. points out that the iPad touchscreen alone may cost Apple about $100, meaning that the company may be "convincing suppliers to invest in new markets," consequentially pushing down component prices.

While analysts with Kaufman, Needham and UBS all observe that the iPad has great potential, Needham's Charlie Wolf cautions that the device is "not yet a revolutionary product." It is really waiting, he suggests, for ideal third-party content, which will include books and customized iPad apps. Wu adds that the Wi-Fi models are likely to sell better, mainly because of cost, since they do not require a data plan and are less expensive on their own. 3G speeds, moreover, are said to be inadequate next to conventional broadband.

Wolf proposes that some 4 million iPads could be sold in the first year of availability, whereas Wu cites supply chain checks that point to production of about 5 million units. Apple may be ready to build as many as 10 million tablets next year, although the first generation of iPads will not be available until April 2010.

by MacNN Staff