Report: Apple tablet could earn $3 billion in a year

One analyst, Mike Abramsky of RBC Capital, predicts that Apple could earn almost $3 billion in the first year, if its expected tablet computer is priced right.

Jim Dalrymple Special to CNET News
Jim Dalrymple has followed Apple and the Mac industry for the last 15 years, first as part of MacCentral and then in various positions at Macworld. Jim also writes about the professional audio market, examining the best ways to record music using a Macintosh. He is a member of the CNET Blog Network and is not an employee of CNET. He currently runs The Loop.
Jim Dalrymple
2 min read

There has been a lot of speculation as to what Apple's rumored tablet will look like and how it will work. One analyst is now speculating on how much potential revenue the device, expected to be announced next week, could bring the Mac maker.

Apple's January 27 invitation.

Mike Abramsky of RBC Capital estimates that Apple will sell each tablet for $600, according to an AppleInsider report. At that price, the "base case" scenario of 5 billion units sold during the first year would bring Apple an additional $2.8 billion in revenue.

Of course, we all know how important price is these days, when launching a new product, so Abramsky gave a couple of other scenarios to consider. If Apple sells the tablet for $800, Apple would see $777 million in revenue for the sale of 1 million units.

You can see the trend here--as the price goes up, the predicted number of units sold goes down.

"Anticipation for an Apple tablet (expected January 27) resembles that of Moses bringing down the 10 Commandments," Abramsky wrote in a research note, reprinted on AppleInsider. "Despite high expectations, we believe that Apple plans to redefine portable computing--as the Mac redefined the PC--by 'creating' desire for a new converged portable device with innovative touch/gestures [and] iTunes content. A 'hit' could provide a possible new growth engine for Apple."

Rumors surrounding the tablet have hit fever pitch since the company announced its event on January 27, but few other than Apple CEO Steve Jobs really know what it will be yet. Expectations of a larger-looking iPod Touch with the ability to read magazines and newspapers, as well as watching video and listening to music, seem to be the consensus among the most popular current rumors.

Be sure to come back to CNET at 10 a.m. PT Wednesday, when we'll be covering the Apple event live.