JP Morgan’s Mark Moskowitz this morning reiterates an Overweight rating on shares of Apple (AAPL), writing that the company’s “Macbook Air” laptop may turn out have much higher sales than he’d initially thought, even though he’s been enthusiastic about the business potential for some time.
Moskowitz observes that Air shipments of 923,000 were 44% higher than the prior quarter, higher than the 17% quarter-to-quarter growth in Mac units, and the fourth quarter of accelerating sales growth.
In previous reports, we had highlighted the MacBook Air as a potential $2-3 billion-plus revenue opportunity. Based on the continued momentum of the product and our conversations with industry participants, our view has become even more constructive. Over the next 12 months, we believe that the average quarterly run rate could reach 1.6M units, which implies a $7 billion-plus revenue profile.
At an average price of $1,150, the Air would produce $1.84 billion per quarter in revenue for Apple, or $7.36 billion a year, he calculates, and contribute 71 cents per share in profit annually.
Moskowitz also thinks sales to China will boost Mac growth “as the company continues to expand and deepen its market coverage” in China.
Moskowitz thinks the competing product, the “Ultrabook” laptops heavily promoted by Intel (INTC), “lacks the right blend of features and attractive price points to grab market share.”
Apple shares today are down $2.02, or half a percent, at $391.60.
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