Build rates have increased, according to a report by Morgan Stanley’s chief Apple watcher
In a report to clients issued Monday — five days before the iPad goes on sale — Morgan Stanley’s Katy Huberty says Apple’s AAPL Asian suppliers have revised their shipping forecasts for the tablet computer, suggesting strong initial demand. Her key findings:
iPad suppliers now forecast shipments of 8-10 million iPads in calendar 2010, up from their previous estimate of 5+ million.
Suppliers now expect to ship 2.5 million in the first three months alone (March to May), considerably ahead of Huberty’s estimate of 750,000 by the end of June.
Shipments are not sales, however, and Huberty is sticking with her sales estimate of 6+ million iPads in 2010. The Street’s consensus, she says, is closer to 3-4 million.
Each incremental one million iPads shipped, by her calculation, equates to earnings increases of roughly $0.25 EPS.
According to Huberty, investors who are bearish on the iPad say it lacks a “killer app.” Apple’s near-term market, she counters, is the sub-$800 notebook computer market (30 million units in the U.S. and 120 million units globally). Longer term, she expects the books, magazines, video and iPad-optimized apps currently in the works to broaden that market.
UPDATE: Reports have started to come in from several sources that iPads pre-ordered on March 12 or 13 have shipped to end users, well in advance of the April 3 release date.