Apple's (AAPL) iPad Outselling Macs, Could Sell 8 Million This Year

It seems that there is a place for a tablet style computer device in the technology market, as according to one analyst Apple Inc.'s (NASDAQ: AAPL) iPad is outselling the company's Mac computers and quickly chasing down sales of its iPhone 3GS.

RBC Capital Markets analyst Mike Abramsky said that the iPad has found demand from consumers that seem to have some pent-up spending sentiment following the recession.

Abramsky believes that Apple is selling more than 200,000 units of the iPad per week, compared to 110,000 Mac computers and just off the 246,000 per week pace for the iPhone 3GS. This has led Abramsky to increase his forecast to 8 million units of the tablet device sold by the end of the year.

Sales of the iPad have remained strong following the launch, which Abramsky believes has been spurred by increased consumer visibility to the device, strong advertising and word-of-mouth marketing, the 3G model launch, and a broadening array of content and applications.

A retail store check has widespread shortages of the iPad popping up, with less than 25 percent of Apple Stores only having the Wi-Fi models available and 3G models are increasingly impossible to find. The Stores that carry the device are allocating waitlists to meet consumer demand.

In additional positive news for Apple, the device is experiencing record attach rates for accessories made for the iPad, with an estimated 15 percent to 20 percent incremental revenue rep unit.

Abramsky sees that the 8 million units sold generating $5 billion in revenue for Apple before taking into account the cannibalization of other product made by the company. Abramsky sees a 25 percent cannibalization rate related to the iPad, which pushes the firm’s revenue expectations for the full year to $59.7 billion with earnings of $13.40 per share, up from prior estimates of $58.3 billion and $13.06 per share respectively.

RBC reiterated its Outperform rating on Apple with a Price Target of $350.

It is not uncommon for an overly-hyped product to sell strong at and shortly after the launch, see Sony’s (NYSE: SNE) PlayStation 3 for an example, but Abramsky see no slowdown in consumer demand for the latest must have gadget from Apple.

Cannibalization may even stay weak throughout 2010 as Apple has recently released the latest models in the Mac computer family, including a revamped edition of its starter notebook and in the worst kept secret in tech, the 4G iPhone is expected later this year.

According to data from NPD Group, Mac computer sales in April jumped 39 percent, well head of the market estimate of a 19 percent increase.

The iPad may be have a detrimental impact on the iPod, which saw sales drop 17 percent in April according to NPD, but this has been a trend as the iPhone has long been taking sales away from the company’s beloved media player.

Market Moving News and Intelligence - 2 Weeks Free

You May Also Be Interested In

• Evolution Metals preliminarily added to Russell 3000 and Russell 2000
• IsoEnergy signs exploration agreement with Kineepik Métis Local
• Greenland Mines releases first S-K 1300 resource estimate for Sarfartoq