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JP Morgan makes $63 billion case for Apple laptop-tablet hybrid

The "A8" processor could drive Apple into a new multibillion market as the chip achieves performance on par with Intel processors powering the MacBook Air, says JP Morgan.

JP Morgan believes an iPad- or MacBook Air-like hybrid could make Apple an even bigger force in the $500-$1,000 segment. Apple

JP Morgan is convinced a laptop hybrid product running iOS should be in Apple's future.

The premise of the JP Morgan argument, via Barron's Tech Trader Daily, is that Apple is missing a $63 billion market opportunity by not building a device that does more than the iPad, i.e., a laptop-tablet hybrid running iOS:

"We believe that Apple is currently missing a $63bn market opportunity by only partially playing in the $500-$1,000 laptop market via the iPad. Our central assumption is that lower priced laptop buyers are not willing to purchase what amounts to an expensive tablet that doesn't fully replace a laptop."

So, Apple should jump into this market because it could "rapidly grow share" toward the 40 percent it currently has in the market for laptops priced over $1,000, amounting to about 25 million additional units, according to JP Morgan analyst Rod Hall.

Then comes the Intel zinger:

"In 2014, we believe that the next A-series chip (probably named the A8) is likely to surpass the computing power of current i5 based MacBook Airs...If our calculations are roughly correct, we would see no reason for Apple not to begin using the A8 in its laptops or -- as we are arguing in this report -- just make its tablet behave as a laptop."

That argument is predicated on the belief that beginning with Apple's "desktop-class" (Apple's words) 64-bit A7 processor, it is now ready to "surpass" (JP Morgan's words) the Intel Core i5 chips powering the current MacBook Air.

It's an argument with legs, for a couple of reasons. One, there are persistent rumors that Apple is developing some kind of hybrid, sometimes referred to as the iPad Pro. And it's a market -- what the Windows crowd calls 2-in-1s -- that Apple has ceded to PC makers and to a lesser extent Android device makers.

So, an Apple entry would undoubtedly shake things up. Think of it: an Apple product to compete with Microsoft's Surface 2 or Surface Pro 2? Now, that would be a fight.