Apple: Little Impact from Lower iPad Prices

Trefis members said their forecast of lower iPad prices in the next five years in will result in a slight upsdie to the stock.
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A slower decline in iPad pricing will have little impact on

Apple

's

(AAPL) - Get Report

We estimate the iPad constitutes only around 8% of Apple's stock. Trefis members have created forecasts for two key drivers of Apple's stock over the last week: (1) iPad Pricing (2) iPad Gross Profit Margin.

The member forecasts suggest that iPad pricing will trend above the estimates of the in-house team of analysts at Trefis, while iPad Gross Profit Margin will trend in line. Apple's iPad competes with

Amazon

's

(AMZN) - Get Report

Kindle,

Sony

's

e-reader, and

Barnes & Noble

's

(BKS) - Get Report

Kindle.

We currently have a Trefis price estimate of $337 for Apple's stock, about 35% above the current market price of $250.

Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

The average of Trefis member forecasts for iPad Pricing indicate a decrease from $604 in 2010 to $501 by 2016, compared to the baseline Trefis estimate of a decrease from $600 in 2010 to $441 by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Apple's stock.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Apple's stock to iPad Pricing.

The average of Trefis member forecasts for iPad Gross Profit Margin indicate a decrease from 54% in 2010 to 39% by 2016, compared to the baseline Trefis estimate of a decrease from 55% in 2010 to 40% by the end of the Trefis forecast period. The member estimates imply a small downside to the Trefis price estimate for Apple's stock.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Apple's stock to iPad Gross Profit Margin.

Our complete analysis for Apple's stock is

here

.

Trefis

is a financial community structured around trends, forecasts and insights related to some of the most popular stocks in the U.S.