October 2010
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Day October 4, 2010

Ticonderoga sees over 15 million iPads in 9 months

White contends iPad could be “one of the most coveted gifts” this holiday season; he sees the company selling 7.1 million units in the September 2010 fiscal year, with 19.9 million in 2011, and 25.8 million in 2012.

The analyst said his target is based on 20x his interest expense/income adjusted calendar 2011 pro forma EPS estimate, plus net cash of $49.43 a share.

via Apple: Ticonderoga Starts With Buy, Street-High $430 Target – Tech Trader Daily – Barrons.com.

If Apple hits 5 million in the just ended September quarter

AT&T Set to Release Multiple WP7 Devices, T-Mobile anchors launch event

As of two weeks ago, AT&T was to be the launch partner for Windows Phone. AT&T had been expected to unveil phones from HTC, Samsung and LG, according The Wall Street Journal.

Windows Phone Thoughts: AT&T Set to Release Multiple WP7 Devices.
Today we hear that the invitations for the October 11 launch event have gone out, without mention of AT&T:

“T-Mobile reps will be present for device showing and their service offering discussion,” according to the invite.

Can’t wait for the spin.

iPad lead seen as 'overwhelming'

Chris Whitmore predicted 2.0 million iPads would be sold in 2010 soon after the product launched. (asymco | Analysts predict iPad sales)

More recently, Chris Whitmore writes for Deutsche Bank:

“We believe Apple’s lead in the tablet market will prove difficult to close by the onslaught of competing products coming over the next several quarters,” he writes in a note to clients issued early Monday. “Ultimately, we expect the slew of upcoming competition to fall flat from a user experience standpoint while struggl[ing] to materially undercut the iPad on price.”

How far ahead is Apple (AAPL)? According to Whitmore:

Goldman downgrades Microsoft, blames iPad

“We believe the intrinsic value of shares cannot be unlocked if the status quo remains, and we have increased caution near term on a more elongated PC refresh cycle, combined with the newer threat of notebook cannibalization from tablets, where Windows does not yet have a presence,” write Goldman Sachs analyst Sarah Friar and associates in the introduction to the report.

More advice about what to do about this in the linked article: Goldman downgrades Microsoft, makes case for major overhaul.

I’d skip over the recommendation to break up the company but the observation that Microsoft might face earnings threat from iPad is provocative. Usually it takes a few years for the incumbent to feel pain and react. The pain might be sooner than expected though the reaction might still take some time as the Windows Phone response to iPhone is taking its sweet time.

Updated estimates for Apple's fourth quarter earnings

We expect revenue to be about $18 billion compared to $12.2 billion in the September quarter last year. We expect gross margins to be about 35%…

We are targeting EPS of about $3.44.

via Apple Inc. AAPL Q3 2010 Earnings Call Transcript.

I’ve updated my estimates from the July forecast as follows: