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iAd Could Be Apple's (AAPL) Next Multi-Billion Dollar Opportunity - Analyst

April 9, 2010 12:56 PM EDT Send to a Friend
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Apple's (Nasdaq: AAPL) newly announced iAd could be the tech company's next billion dollar opportunity, according to analysts.

Broadpoint.AmTech analyst Brian Marshall said, "we believe the iAd platform could generate an incremental ~$2.5bil in revenue and $1.00+ to AAPL's financial model when the business hits its stride."

The firm's sensitivity analysis showed that iAds can generate incremental revenue/EPS ranges from ~$300mil/$0.13 to ~$4.7bn/$2.15 when fully ramped.

The firm arrives at the $2.5 billion mid-point number by taking total ad impressions of about 365 billion per year, multiplied by a CPM of $17 (or $0.017 per ad) then multiplied by a 40% take for Apple.

The firm kept their Buy rating and $280 price target on Apple despite this new opportunity.



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