NEW YORK (
on Wednesday, and by all accounts this should continue to drive Apple's earnings higher.
Initial reaction to the new iPad (as Apple is calling it) was tepid from the likes of
and tech journalists, but analysts believe that Apple's third-generation tablet is likely to keep consumers rolling in, and should keep Apple's healthy dominance over the market for some time to come.
Led by new features such as Retina Display, Long Term Evolution (LTE), enhanced iSight cameras, voice dictation, and a much more powerful processor, Apple has firmly kept its lead in the tablet market, said Canaccord Genuity analyst T. Michael Walkley in his research report following the announcement.
Walkley noted that Apple has sold over 315 million iOS devices (including 62 millionin its most recent quarter), and now has more than 100 million iCloud users. He also noted Apple's strong retail presence -- 362 stores and counting, which are packed with millions of customers around each day.
"We therefore believe the new iPad will enable Apple to maintain its dominant position of the tablet market for the remainder of 2012 despite new Android tablets across all price tiers and the upcoming launch of Windows tablets," Walkley wrote in his research note. He rated Apple shares a buy with a $665 price target.
The inclusion of LTE capability was a big selling point for Sterne Agee's Shaw Wu, who recently upped his price target on Apple to $620. He rates Apple a buy.
Wu said he believes that Apple's including 4G LTE wireless will lead to a better user experience because it is "substantially faster," while still maintaining a 10-hour battery life for most usage. (It will have a 9-hour battery life on LTE).
"We do not believe this can be easily replicated as AAPL is unique in the industry with its core ownership of key intellectual property including battery chemistry, systems design, and software," Wu wrote in his note after the new iPad announcement.
The new iPad will be compatible with the 4G networks from
Apple's inclusion of the new features makes the new iPad upgrade a "quality one," said J.P. Morgan analyst Mark Moskowitz. He said the new features "all stand to cement Apple's market dominance in a preemptive response to any onslaught of Windows 8-based tablets later this year." He rated Apple shares overweight with a $625 price target.
Piper Jaffray's Gene Munster estimated that Apple will sell 60 million iPads in calendar year 2012, but after the announcement Wednesday he said believes this may be conservative. Apple has sold over 55 million iPads since the product was introduced in 2010.
Munster noted in his research report that the tablet market could become larger than the 350 million-plus unit per year PC market, and the new version of the iPad helps Apple maintain its dominance in this market. He believes Apple could sell 225 million iPads in 2016, and the long-term thesis suggests that his near-term (one-year) estimates are too low. He rates Apple overweight with a $670 price target.
It's clear that Wall Street believes that Main Street is likely to gobble up the new iPad when it goes on sale. Judging by the reaction of those in attendance Wednesday at Apple's unveiling, the company was right when it labeled the invitation, "We Have Something You Really Have To See. And Touch."
Written by Chris Ciaccia in New York
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