Apple set to launch tablet-size device

MarketWatch

SAN FRANCISCO — Apple Inc. is on track to launch a much- anticipated tablet-size computing device early next year, according to brokerage reports Wednesday.

The end-of-the year business period has become known as the “iPod Quarter” for Apple Inc., because of the historically strong sales of the company’s digital- media players that often exceed 20 million devices during the holiday season.

But with sales of iPods showing signs of leveling off, Apple is thought to be working on a new, tablet-style Mac that incorporates some of the touch-screen features of the iPod touch and will help the company continue with its multi-year streak of hit products.

Analysts who follow Apple say that there is evidence that Apple could launch its anticipated tablet Mac as early as next spring.

The move could be fortuitous for Apple, as a spring launch would come around the time of the company’s slower business periods and ahead of any new advances in the iPhone, which has historically been refreshed during the summer.

Apple shares were up 4 percent to $197.80 in trading Wednesday. The stock has more than doubled so far this year.

Oppenheimer analyst Yair Reiner said in a research note Wednesday that checks with computer supply- chain manufacturers suggest that Apple “will begin ramping production in earnest in February, implying that the tablet could launch in late March or April,” as long as there aren’t any delays in the production process.

Reiner believes that the tablet Mac will be similar in size to many so-called netbook PCs, with a display that measures about 10 inches diagonally. Reiner also said in order to stoke demand for the new tablet, Apple is holding discussions with book publishers about distributing their titles over a new ebook platform with Apple.

In a separate note, Vijay Rakesh of ThinkEquity said his checks with computer supply chain manufacturers indicate Apple is on track to ship between 1 million and 3 million tablets during the March quarter. Rakesh estimates that the initial tablet will come with as much as 64 gigabytes of storage.

One company potentially threatened by an Apple tablet is Amazon.com, which is enjoying strong sales of its Kindle e-reader device.

While a tablet device would likely have more functions than simply reading, Apple is reportedly in talks with book publishers regarding the new device. Reiner of Oppenheimer said the company has been “actively reaching out to book publishers with a very attractive proposal for distributing their books on a forthcoming e-book platform,” which he presumes would be the tablet.

“Apple will split revenue 30/70 (Apple/publisher); give the same deal to all comers; and not request exclusivity,” Reiner wrote. “We believe the typical Kindle/publisher split is 50/50, rising to 30/70 if Kindle is given e-book exclusivity.”