I'm taking time out today not to talk so much about Apple's finances, but to talk about an amazing product that is a catalyst for another era of spectacular growth for the maker of Macs, iPhones and iPods. It's the Apple iPad. I'm sold on this product today and I look forward to the feature and functionality enhancements in the years to come.
In July I posted a blog entry about My $1,000 iPad Purchase Odyssey. Since the moment I unwrapped and powered up this device the manner in which I do many things from read the news, surf the Web and organize my work day have changed in dramatic ways.
In a recent Apple 2.0 column Philip Elmer-DeWitt quotes Morgan Stanley's Katy Huberty about her claim Apple has told suppliers to ramp up for a run rate of 3 million iPads a month. I believe the global market can support sales of at least 3 million iPads a month and more. This is the most immersive digital device I have ever owned and about the most productive digital device I could bring to my office.
Assuming for a moment Katy Huberty's claim is accurate and Apple has told suppliers to ramp up for a 3 million unit a month run rate, in fiscal year 2011 Apple would generate more revenue from the iPad alone than the company generated from all sources as recently as three years ago in fiscal year 2007, including retrospective adjustments to revenue from iPhone sales.
The Apple iPad is a revenue and earnings monster. It will chomp on netbook and laptop sales, sales of handheld gaming devices and drink up revenue from book and software sales as old economy industries such as newspapers and magazines adapt to the iPad economy and software developers migrate to the iOS devices.
A Uniquely Personal Device
In the seven weeks I've owned an Apple iPad it's become my primary portal for news and information, for Web surfing and my favored device for concept development for projects at home and work. Beyond these necessary tasks the iPad is an excellent book reader and I'm discovering its many uses as a handheld theatre for home entertainment. This afternoon I downloaded Epic Citadel and explored this application as a preview of games to come.
My favorite news apps are: NPR for iPad, the BBC News, AP News and NYT Editors' Choice. Each of these apps showcase why the Apple iPad is a news reader beyond compare.
I've been taking my iPad to work recently and it has quickly become my most productive office tool. Last week I purchased the Manage app by Kerofrog. It's an easy to use, visually appealing app for keeping track of tasks. Task lists can be emailed in both text and .pdf form.
The Apple keyboard and dock for the iPad positions the device in a such a way it looks like a functioning piece of modern art compared to the PC with which it shares space on my desk. Apple's Pages app functions well for both note taking and composing communiques. Dropbox has become an essential for moving documents from home to work, from Mac to PC, and to and from my iPad. SketchBook Pro from Autodesk, iDraft by Wondershare and iBrainstorm by Universal Mind function well as resources for drawing out ideas, concepts and notes. I've been surprised how frequently I prefer to use the iPad at work with a full-sized PC at my desk.
The Apple iPad As A Global Revenue and Earnings Monster
If Katy Huberty's claims are accurate and Apple is ramping iPad manufacturing runs to 3 million units per month, there's no reason the company can not sell 36 million iPads in fiscal year 2011. While some might consider this level of unit sales almost unreal, I see the Apple iPad emerging as a digital lifestyle necessity.
At 36 million units, the Apple iPad would generate about $25 billion in revenue for Apple from device and accessories sales. This does not include revenue activity from the sales of content through iTunes or revenue generated from iAd activity. The Apple iPad, in its first full fiscal year of sales, may represent as much as 25% of Apple's fiscal year revenue activity.
I reiterate my revenue estimates for Apple of $65 billion in revenue this fiscal year, $100 billion in revenue next fiscal year and for the share price to reach $400 by May 2011.
In my view the Apple iPad represents much of what was envisioned when the personal computer became a mass market product in the early 1980's. Thirty years later the Apple iPad provides for a uniquely personal experience and has the potential to transform the ways in which we use technology at work and in a manner that can not be accomplished with a desktop PC. The iPad's ultra-mobile form and its access to hundreds of thousands of low-cost/no-cost apps will reshape how we use technology at home, at work and at school.
The Apple iPad is a revenue and earnings monster on a global scale and will be a catalyst for 50% growth in revenue for Apple in its next fiscal year beginning at the end of this month.