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An analyst said Apple (NASDAQ:AAPL) may phase out the second-generation iPad as it turns its focus to the iPad Mini, predicted to launch next week. Evercore Partners’ Rob Cihra said in a note to investors that phasing out the older tablet made sense for Apple as its overall vision asked for “clearer product tiers.”
The 7.85-inch Mini is expected to be priced sub-$300 and once it is unveiled, it will be the lowest-entry tablet in Apple’s lineup. The tablet is expected to cut into the gains new devices from Google (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT), have been making.
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Cihra, who has an overweight rating and an $800 price target on Apple stock, predicts the company will sell around 7 million units of the smaller tablet in the December quarter out of a total of 26 million units of its complete iPad line. The analyst also expects it to sell 49 million iPhones in the quarter to post $56.1 billion in total revenue and $16.33 in earnings per share, Apple Insider said.
For the September-ended quarter, Cihra has predicted sales of 27 million iPhones, 17 million iPads, 4.9 million Macs, and 5.7 million iPods to offer up revenue of $36.5 billion and earnings per share of $9.03. The Wall Street consensus is for $36.4 billion in revenue and $8.93 earnings per share.
Cihra says Apple is leveraging its engineering expertise in hardware and software to “pull dollars away from otherwise commodity markets and incumbent competitors.” Apple’s revenue in this calendar year is up 30 percent year-over-year, while the broader PC market has dropped 4 percent this year.
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