Analyst: iPad Surpasses Expectations

Apple showed off the iPad on January 27 at a special media event in San Francisco, and Broadpoint AmTech's Brian Marshall thinks the company exceeded expectations with its new tablet device.

"In our view, Steve Jobs and the Apple crew surpassed expectations with the long-anticipated unveiling of the tablet device, officially named iPad," Mr. Marshall said. "While we were impressed with the specs during the briefing given by Mr. Jobs, it was not until we actually used the iPad for about 15 minutes were we convinced this will be another grand slam product for Apple."

The iPad is a multimedia tablet device with a 9.7-inch multitouch display, built-in Wi-Fi and optional 3G wireless data connectivity, iPhone application support, and more. Apple is calling the iPad a new class of device that fits between the iPhone and iPod touch, and the company's laptop lineup.

While there has been some speculation that the iPad will cannibalize Apple computer sales, Mr. Marshall thinks it won't be because it is more of a media player instead of a laptop in tablet form. He also sees the iPad's iBooks and iBookStore ebook features as a natural evolution from the iTunes Store and App Store.

Apple's deal with AT&T gives iPad owners the option of buying 250 MB of data per month for US$14.99 without a contract, which will likely draw more buyers to the higher priced models. The downside of the no-contract model, however, is that Apple won't see high subsidy payments from cell service providers.

Mr. Marshall is maintaining his "Buy" rating and $264 target price for Apple's stock. Apple is currently trading at $199.62, down 8.26 (3.98%).