Apple's Tablet Can't Prevent Sales Malaise

Crunch Time

The past decade of success makes this next step pivotal for Apple and the stock.

Apple shares have had a great run this year. People who debated whether to buy at $80 in January saw the stock blow by $100 in March and top $140 in June.

Much of that run-up has been driven by the popularity and expansion of the iPhone. But soon, if not now, investors will start to wonder what's next.

To answer that, Apple is putting the final touches on its Tablet or a family of tablets. The touchscreen device expands on the iPod Touch and offers users a bigger, more brilliant screen. As a product, the iTablet falls somewhere between smartphones and laptops, yet lacks a physical keyboard. Pricewise, the Apple tablet probably will land below the $1,000 Macbook and above the $300 netbook category.

Apple's tablet probably will be ultra-slim and packed with features (see our wish list) and is likely to be a big hit with people who like video calling and eReaders like Amazon's (AMZN) Kindle. Potentially worse, perhaps, is that Apple's unblemished coolness could get bruised if the cutting-edge device is embraced by electronic clipboard fans like car rental agents and hospital staffs.

The point here is that Apple's iPhone is a popular mass-market device on track to sell 30 million or more units this year. The would-be successor to that product, the iTablet, has a bit of a hurdle ahead of it. The most popular tablet today, the Amazon Kindle, sold an estimated half million units last year.

While Apple has worked fiendishly to make the Tablet a potent product to sustain sales growth, investors may worry that it's merely a placebo.

Written by Scott Moritz in New York.

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