Apple Is a $700 Stock: Trefis

iPad

The iPad's sales were a tad lackluster as the new iPad was launched late in the quarter and customers probably held off buying an iPad until the new one was launched. iPad sales came in at 11.8 million units, about 150% higher than the year-ago quarter but 25% lower than the previous quarter. However, the new iPad had a tremendous opening, selling over 3 million units in the debut weekend itself and will have more of an impact in the coming quarters. In any case, the iPad only contributes less than 12% of our price estimate, and the impact of this product is therefore limited.

Going forward, we see the iPad performing well in the absence of meaningful competitors in the tablet market and the very nascent stage that the market is in. However, a very potent threat in the form of Microsoft's (MSFT) Windows 8 looms on the horizon.

Microsoft plans to launch Windows 8, which will be made available on both PCs and tablets, later this year. A lot of PC as well as smartphone manufacturers are expected to jump in on the offering to tap the nascent tablet market.

Microsoft has a widely installed PC base in place that it can leverage to pose a big threat in the young market. Moreover, it can also leverage its partnership with Nokia (NOK) to push for an integrated experience across all devices, mobile or PCs, in order to create a viable third ecosystem.

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