Can Apple Really Sell This Many iPads Next Year?


Just weeks ago, Tim Cook announced that Apple (NAS: AAPL) had sold its 100 millionth iPad, shortly after the close of the fiscal year. While that was a hint of the iPad "miss" that was in store for the fiscal fourth quarter, that figure is still impressive in its own right when you consider the device category didn't exist three years ago.

That's 100 million units in two and a half years. In comparison, the iPhone took four years to break 100 million in cumulative unit sales. Through the end of last quarter, the iPad cumulative total sits at 98.2 million, since Apple didn't cross the 9-digit threshold until October.

Source: SEC filings.

Amazingly, Canaccord Genuity analyst Michael Walkley now predicts that Apple will sell over 100 million iPads in calendar 2013 -- 101.6 million to be precise. iPad mini adoption will play no small role in driving that figure since it has a lower entry-level price. That's a similar prediction to when FBR Capital Markets analyst Craig Berger predicted that the iPhone 5 will double Apple's lifetime iPhone unit sales throughout that device's product cycle.

By Walkley's estimates, selling that many iPads next year will earn Apple a 58% market share. He also predicts that (NAS: AMZN) will sell 10.7 million of its Kindle Fire HD tablets next year, while Samsung may only move 8.4 million tablets. However, this prediction was made before Google (NAS: GOOG) officially unveiled its Samsung-built Nexus 10 tablet, so it's possible that new device hasn't been factored into these estimates. Nexus devices tend to drive sales for OEMs, so Sammy may see some Nexus upside. For example, Asus just reported its largest quarterly profit in four years, driven in part by the Nexus 7 that it builds for Big G.

iPad average selling prices have been trending lower ($535 last quarter) ever since the iPad 2 remained in production at lower price points. This will continue as the iPad mini is priced even lower. If we use a fairly conservative iPad ASP estimate of $450 for next year, then we're talking nearly $46 billion in iPad revenue in 2013. That would be an increase of over 40% from the $32.4 billion in iPad revenue in the fiscal year that just closed. A $500 iPad ASP gets us to $50.8 billion -- or 57% iPad revenue growth.

2013 is going to be a good year.

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