Will This Monster iPad Boost Apple Earnings?

Apple’s (NASDAQ:AAPL) new iPad with increased memory will add 2 cents to the company’s per share earnings for every 100,000 units sold in this quarter, according to Wells Fargo analyst Maynard Um. Um said his calculations assumed an average selling price of $864 and a higher gross margin for the device.

Apple announced a new iPad with twice the memory of its current largest fourth-generation model on Tuesday. The new tablet, with 128 GB storage, will be available starting February 5 for $799 for a Wi-Fi version and $929 for a cellular model.

“We believe the new device will be in addition to the current product portfolio and will fill a hole in the market for tablets with larger storage capacities (business users and/or high-end consumers),” Um wrote in a note to investors.

The analyst added that he didn’t believe the new device would hurt sales of Apple’s existing iPad versions. “Given that the new iPad is, in our opinion, geared towards a different end-market than the current iPad portfolio, we believe there should be minimal cannibalization of existing iPads,” he wrote.