Apple’s (AAPL) next-generation iPhone will be unveiled next month. The company hasn’t made any announcements yet regarding the launch of its most highly anticipated new device, but the timing has been confirmed by about a dozen different publications at this point, including Bloomberg, Reuters and The Wall Street Journal’s AllThingsD blog. While one report from a source with a good track record points to an iPad mini announcement at the same September 12th press conference, various people with various knowledge of various plans speaking to various news organizations can’t seem to confirm whether or not Apple will take the wraps off a smaller tablet next month. So, is it coming or not?
According to RBC Capital Markets analyst Amit Daryanani: Definitely. Maybe.
“Recent supply-chain commentary points towards a material ramp-up within AAPL’s ecosystem ahead of the iPhone 5 refresh this fall,” Daryanani wrote in a research note on Thursday. “Simultaneously, supply-chain checks suggests we will have more than just a iPhone-5 launch. While its unclear if the additional product is an iPad refresh or a ‘mini iPad’, we do believe AAPL may look to leverage the price elasticity of the nascent tablet market by having a ~$300 device.”
The analyst continued, “The release of an ‘iPad Mini’ could enable AAPL to accelerate tablet adoption especially in the education vertical. We estimate 40M units could be sold over the first 12 months yielding $10B in revenue and $1.15 in EPS. Fundamentally, we believe investors should remain long AAPL ahead of multiple catalysts including i.iPhone 5 refresh in fall, ii.potential new iPad products in fall, and iii.iTV launch in 2013.”
Daryanani does note that an iPad mini could have some potential negative implications for Apple. For one thing, a device priced between $249 and $299 would lower average selling prices (ASPs) and potentially cannibalize sales of higher-priced iPads, thus trimming revenues. The analyst also states that if Apple does decide to launch a smaller tablet, it would be “veering off previous commentary of the late CEO Steve Jobs.”
RBC reiterated its Outperform rating and its $700 price target on shares of Apple stock, which closed down 0.65% at $606.81 on Wednesday.