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The Smart Cover…..Gadget of The Year and Profit King
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Horace sets the tone….look at these numbers for the ‘gadget’ of the year
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I was only half-joking when, on first sight, I tweeted that I will buy a new iPad 2 to go with my new Smart Cover. The new iPad cover is enchanting.
It also seems to be enchanting to many.
I?m estimating that at least 60% of iPad buyers will get one. Based on an estimate of 36 million iPads sold in 2011 and an average price of $48 (70% polyurethane and 30% leather mix), the total revenue for Smart Covers will top $1 billion this year.
I further estimate that with a very modest gross margin of 75% (average cost to produce of $12), the Smart Cover could contribute $777 million to Apple?s gross margins.
The iPad by itself should generate $23 billion in revenue and a contribution of $7.7 billion. That means that the Smart Cover will add 4% to sales and 9% to gross profits. If taken as a bundle, the iPad+SC will increase gross margin over the iPad alone by nearly 200 basis points (taking it from 33% to 35%).
It will be interesting to compare the Smart Cover business with competitor tablet businesses.
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AAPL: to boldly go where no stock has gone before
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The iPad by itself should generate $23 billion in revenue and a contribution of $7.7 billion. That means that the Smart Cover will add 4% to sales and 9% to gross profits. If taken as a bundle, the iPad+SC will increase gross margin over the iPad alone by nearly 200 basis points (taking it from 33% to 35%).
I don’t doubt that the smart cover will juice the iPads GM, when taken together. However, I think your margin on the iPad on its own is pretty strong at 33%. We’re all guessing at it though, as Apple does not publish gross margin by product category.
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I bought the leather one for mine. I only see myself using it when I am transporting it or just letting it sit. If I have it on it makes the iPad heavy.
Many will buy but not sure how many will use regulary. Apple will sell a ton of these and we shareholders will make some nice profits.
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I went through 5 covers/ cases on my first iPad and was never entirely happy with any of them. I LOVE the SmartCover I bought with iPad 2. I think they’re going to sell almost as many as they do iPads. I have the leather also. Don’t find it heavy at all. Provides a bit of protection without taking away from the beautiful design. The two positions it props the iPad to are perfect for typing and reading in a restaurant. This is an absolute home run as far as I’m concerned. Every person I saw buying iPad 2 also bought the Smart Cover.
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The Smart Cover as a refrigerator magnet.
Now you can watch videos, surf the web while you grab a beer…...
http://www.9to5mac.com/56539/smartcover-doubles-as-a-ipad-frige-magnet/
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AAPL: to boldly go where no stock has gone before
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I bought the leather one for mine. I only see myself using it when I am transporting it or just letting it sit. If I have it on it makes the iPad heavy.
Many will buy but not sure how many will use regulary. Apple will sell a ton of these and we shareholders will make some nice profits.
Heavy? Sponge Man, you need to swing the club less and lift weights more.
I use the leather cover all the time—the cover folds on the back securely and is comfortable to hold this way. Leather is warm; aluminum is cold.
