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January 26, 2022

How big of a hit will Apple's tablet be?

Secrecy works in different ways for different people.

For Tiger Woods, par exemple, secrecy wasn’t so good. Nor was it for Bill Clinton, circa 1998. Or Conrad Black. Or Bernie Madoff. Or Barry Bonds. Or Martha Stewart. Or … you get the point.

But where Steve Jobs, that guy over at Apple, is concerned, a shroud of mystery appears to be doing him just fine.

As has become his custom, Jobs is set to unveil a new product – he hasn’t said what – tomorrow, the latest in a line of the-buzz-is-just-killing-you-guys-isn’t-it hardware announcements that create a hysteria not seen since, well, everyday on Oprah.

We remember this most famously with the iPhone, which (although anticipated) was brought down from on-high by Jobs in 2007, quickly causing a consumer frenzy and helping Apple move over 13 million of the units in its first year-and-a-half alone.

This time? We pretty much know what’s coming, too. Apple’s much-anticipated tablet computer – a smart phone/laptop fusion – is almost assuredly set to be the focus of Jobs’ press event this week.

The question is: how much of a bread-winner can the tablet prove to be?

According to the Financial Post, many analysts are frothing at the mouth over the thought of the tablet, which is believed to fall somewhere in between a “niche” product and “hit” product.

RBC Capital Markets analyst Mike Abramsky classifies the two as such: a “niche” product, like the MacBook Air, could move as many as one million units per year. A “hit” product like the iPhone, however, shovels 10 million units per year off store shelves everywhere.

Under a modest scenario, Abramsky considers what could happen if Apple’s tablet performs somewhere in between. If the computer maker can move 5 million units in its first year, the tablet would add a bit less than US $3 billion to Apple’s revenue, based on a presumed $600 retail price.

If tablet catches on like so, Apple could increase its share of the worldwide personal computer market by as much as 40%, suggests the Post’s Matt Hartley.

A stretch? You’d think so, but consider what we knew about the iPhone even one day before it was announced. Not much, right? Now, the device has become so powerful it’s surpassed every other Apple product in terms of revenue generation.

The tablet isn’t likely to get that far, but as Abramsky admits, build-up (the “anticipation … resembles that of Moses bringing down the 10 Commandments,” he said) has already hit a fever pitch.

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...