San Francisco: Anyone holding their breath for Apple Inc’s much-anticipated, but never confirmed, touchscreen tablet device may have to wait a bit longer than they planned.
Early hopes that Apple could introduce a tablet — or “iPad” — at an event in September have given way to expectations that the company will instead roll out a refreshed lineup of its iPod devices.
“It has to be great — and I don’t think it’s going to be ready for September,” FBR Capital Markets analyst Craig Berger said of a tablet device that many expect would likely resemble a larger, keyboard-less iPod touch.
A number of companies have been working to put their stamp on a nascent tablet market that has yet to be truly defined, from personal computer manufacturers to Amazon.com Inc with its Kindle electronic reader.
Apple has a tradition of hosting a glitzy September media event, using it to launch devices such as the iPod touch model in 2007 and the iPod nano in 2005. While it has yet to announce anything, it is widely expected to repeat the practice this year.
With hopes low that a tablet will be rolled out next month, analysts say there is little risk that its absence will hurt Apple’s stock.
The year’s event would be particularly important if chief executive Steve Jobs were to make his first public appearance since a nearly 6-month leave of absence for health issues. Investors will be keen to see for themselves how well he appears.
Jobs’ appearance could overshadow any products at the event, especially without a tablet. Odds are that the iPod nano and iPod touch will be refreshed with digital cameras, analysts say, and the iPod touch could also get a video camera. Apple could also unveil the ninth generation of its iTunes software.
Although Apple declined to comment, many analysts believe the tablet may not arrive until later this year or next, given the company’s well-known reluctance to rush any device to store shelves before it is fully ready for consumers.
Whatever the timing, the prospect of a tablet generates enthusiasm from those who follow the company or own shares. It would likely mark a new product line in the company’s device portfolio, which includes the red-hot iPhone, along with the iPod and Mac computer segments, which have matured.
Why a Tablet?
Barry Jaruzelski, a partner at consulting firm Booz & Co, cautioned that the tablet space has proved to be a challenge for all who have tested it. Apple, he said, must answer one critical question: “What do I need a tablet for?”
He also noted that Apple’s major successes this decade — the iPod and the iPhone — were helped by the services that accompanied them, namely iTunes and the App Store.
“It’s got to be something more than just a device. It’s got to be the apps or some sort of solution or service linked to the device, otherwise it’s hard to see how it’s going to be big, as opposed to just nice,” he said.
Broadpoint Amtech analyst Brian Marshall expects the device to carry a price tag of $500 to $600, and have both WiFi and cellular connectivity, potentially subsidized by Verizon Wireless in the same way that AT&T subsidizes iPhone purchases. Verizon Wireless is a venture of Verizon Communications Inc and Vodafone Group Plc.
He also said expectations are that the tablet will pack a low-power processor from Samsung Electronics and a Qualcomm Inc wireless chip.
To be sure, there are tablet notebook PCs already on the market, including offerings from Hewlett-Packard Co, Lenovo and Fujitsu Ltd, with swiveling touchscreens. Some models cost more than $2,000.
At the same time, e-readers from Amazon.com and Sony Corp have carved out a solid niche in the marketplace.
But analysts envision something different from Apple, more of a multimedia device.
“If they can develop a fantastic product that’s ahead of the competition they’ll roll out with their tablet,” said Berger. “If it’s a me-too device, they’re not going to come out with it.”
Ankur Crawford, an analyst at Fred Alger Management Inc, which owns Apple shares, said she does not think the tablet has been priced into Apple stock or analysts’ sales estimates.
Apple’s stock has nearly doubled this year, and the shares trade at around 29 times forward earnings.
She said a tablet would be a way for the company to compete indirectly with netbooks, which are stripped-down, low-cost PCs that have become a favorite of consumers.
“I bet a lot of the people buying $400 netbooks will say ‘You know what, I’m going to take that extra $200, I’ll get an iPod, I’ll get a video player, I’ll get so much more, I’ll get this really cool device and I’ll upgrade to it.´”