Apple Surges to Record on Rumors

NEW YORK (TheStreet) -- Apple(AAPL) shares surged 3.4% to a record high Thursday amid speculation that a major product announcement -- possibly the long-anticipated tablet computer -- will be coming in January.

Apple stock rose $6.94 to close at $209.04 in a shortened trading day after the Financial Times reported that Apple may be preparing for a big announcement after renting space for several days in late January at an arts center in San Francisco.

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While Apple hasn't officially confirmed plans for a tablet, the expectation of an  iPad has captivated the imagination of enthusiasts and sparked debates among gadget fans and investors for more than a year as they eagerly await a new blockbuster device from Apple.

Tablet-sized e-readers are a growing niche among players like Sony (SNE Quote) and Barnes and Noble (BKS Quote). But Apple fans may find a me-too e-book a bit beneath the vaunted standards of a Steve Jobs-driven project.

With the Amazon (AMZN Quote) Kindle in its sights, Apple is believed to be preparing to start production of a 10-inch touchscreen e-book with the first model expected to arrive as early as March, Oppenheimer analyst Yair Reiner said earlier this month, citing information from suppliers. The report confirmed earlier rumors that suppliers were gearing up for a February kickoff of the Apple Tablet.

Apple has also been working on terms with publishers that would split the revenue of electronic book sales by a 30/70 ratio, with book companies getting the larger cut, writes Reiner. The terms would be a departure from the even split that Amazon shares with publishers.The product's lengthy road to launch and rumors of a possible partnership with Verizon(VZ), have raised expectations that Apple may finally have a breakthrough product that could build on the success of the iPhone and the Mac computer line.