Apple’s Stock Showing Strength in Anticipation of iPad 3

AAPL: Apple logo

Apple’s (NASDAQ:AAPL) stock has moved up steadily over the last few days and, for the first time ever, Apple’s market cap touched half a trillion mark during last Tuesday’s trading session. Our $550 price estimate for Apple’s stock is within reach. We believe this movement is mainly attributable to the expected announcement of the iPad 3, and we may look to update our forecasts following this event. The company has scheduled a media event today and is expected to make an announcement in this regard. Amid speculations about iPad 3 features, we believe the new tablet will have a faster processor, a high resolution retina display and may support 4G LTE technology.

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iPad 3 to Strengthen Apple’s Position

Apple is the largest player in mobile PCs, which includes tablets and notebooks, with a share of about 27% as of Q4 2011, while HP (NYSE:HPQ) and Dell (NASDAQ:DELL) are at distant second and third. [1] With a possible announcement of the iPad 3, Apple could strengthen its leadership position in the mobile PC market.

Another interesting finding from the above report was that the iPad formed nearly 80% of Apple’s mobile PC shipments during Q4, and currently commands a tablet market share of 59%. This is remarkable considering that the iPad has been in the market for less than two years.

Could Apple Introduce iPad Mini?

Companies such as Amazon (NASDAQ:AMZN) and Research in Motion (NASDAQ:RIMM) have introduced lower-priced tablets to compete with Apple in the tablet market. While Amazon’s Kindle Fire comes at a price of $199, RIM slashed its basic tablet price to $199 a few weeks back. The $200 tablet price point has become a niche segment in which Apple would look to compete, and it might introduce iPad mini specifically targeting this segment.

Understand How a Company’s Products Impact its Stock Price at Trefis

  1. iPad pushes Apple to 26.6% of the mobile PC market in Q4, BGR quoting NPD DisplaySearch as the source, February 23rd, 2012 []