In a research note to clients, Piper Jaffray analyst Gene Munster suggested that Apple is developing a 7-to-10-inch tablet priced at $500 to $700, perhaps ready for the public in 2010.

According to AppleInsider, Munster's contacts in the supply chain haven't seen a prototype of the device, but are in discussions with Apple to supply components for something at that size and price point.

Munster believes that Apple could adjust the iPhone SDK to allow for multiple display resolutions. Apps like Safari and Mail, he says, would benefit from the additional screen real estate. He also mentions that with the larger screen, more than one traditional iPhone app could be run at once.

As for timing, Munster suggests that the device could be ready next year, and possibly be subsidized by a wireless carrier.

As with most analysis of this kind, this is two parts hearsay, one part "interpretation of conference call statements," and seven parts wishful thinking. In providing technical details about a product that may not exist, Munster is writing checks that Apple might not be able to cash.

Is this something you'd buy? Is it even going to happen? Sound off in comments.

Hot off the heels of the news that the iPhone is dominating independent mobile gaming comes this interesting statistic: 14% of all people downloading mobile games are doing so on an iPhone. Market research group comScore says that not only is the iPhone picking up double digits of all game downloads overall, but that 32.4% of all iPhone users have downloaded a game. We're not sure if this means purchased a game over the air or bought it in iTunes' App Store and then transferred it onto the phone, but that's a lot of downloading.

And the numbers are increasing -- 8.5 million Americans downloaded mobile games onto their devices in November of last year, up 17 percent from the year before. And smartphones in general are growing -- last year, there were zero smartphones sitting in the top 10 mobile devices for downloading, says a comScore analyst, and this year, six of the ten on the list are smartphones. Sounds like an emerging market to us, and the iPhone is sitting right on top.

UBS analyst Maynard Um says that Apple could sell 7 million iPhones in the first quarter of the year if they sell a low-cost, 4GB model, according to Electronista.

Citing "checks" with industry partners, Um claims a 4GB model is in the works, though it's unclear if it will be a regular iPhone at a lower price point, or a smaller iPhone nano device rumored to be in development. While it may cannibalize sales from the current low-end 8GB model, a significantly lower price could add 1.5 million more sales for the quarter.

Generator Research's Andrew Sheehy goes even further, projecting that Apple could sell 77 million iPhones by 2013, according to Philip Elmer-DeWitt. Sheehy has three reasons why Apple will dominate the smartphone business:

• Apple's ability to combine hardware and software, making it easy for users to consume
• The App Store's vertical platform model leads the market so far
• Smartphones are the only kind of phone that Apple makes, unlike other handset manufacturers like Nokia.

Sheehy says that, among other recommendations, Apple must broaden its offering to include higher- and lower-end units, including tablets and entry-level smartphones: All with access to the App Store.

He also says that Apple will capitalize on the paralysis brought on by a weak global economy, and use its cash to get "one or two design cycles ahead of the competition."

"When rivals start spending again, they may discover that Apple has built an unassailable lead," Sheehy writes.

Citi analyst Richard Gardner repeated the firm's "buy" recommendation for Apple stock, but reduced his estimate through 2011 to "reflect a more conservative view of consumer spending," according to the Associated Press.

Gardner reduced his 12-month price target to $132 from $153. He noted "soft" iPhone shipments in the last quarter of 2008 and conservative guidance for the first quarter of 2009 as reasons behind the cut.

"We view weakness as a buying opportunity," Gardner said. If Apple's stock were to drop by $7 or $8 before the company's Q1 2009 conference call on January 21, "[Citi] would be aggressive buyers." He expects the company will announce a profit of $1.42 per share for Q4 2008 during the call.

AAPL was down by about $1.45 in afternoon trading.

[Via Mac Observer.]

Our favorite-named analyst, Piper Jaffray's Gene Munster, predicts that Apple will announce new Mac models at Macworld Expo, and a smaller iPhone for the March quarter.

Piper Jaffray expects that Apple will sell 45 million iPhones during 2009, though that estimate is predicated on the fact that Apple will release a lower-cost iPhone model early in the year, priced between $99 and $149.

As for Macworld Expo, the expectation is that there won't be any groundbreaking announcements, since Phil Schiller will be giving the presentation. They do expect new iMac or Mac mini models, however.

Piper Jaffray is maintaining its "buy" rating, and $235 price target, on shares of AAPL. The stock was up slightly during morning trading.

[Via StreetInsider.]

Which hardly seems believable, but you never know. Yes, Walmart, that bastion of crass commercialism, is going to be carrying the iPhone, that symbol of elegant commercialism, and what we're going to get is a whole lot of commercialism. Analyst Gene Munster (our favorite prognosticator other than the Groundhog himself) says that not only will Apple sell a whopping 45 million iPhones next year, but a tenth of them will be sold right here in America at good ol' Walmart.

Apparently he didn't change his numbers from before the announcement of the Walmart deal, since he had already planned on Apple finding other ways to sell the iPhone. But man, that's a lot of iPhones – enough to give everyone in my current city of Chicago an iPhone, and then some to spare (we'd send them to St. Louis, if we actually had a Walmart here to buy them from).

But no one's ever been proven wrong overestimating Apple sales we guess. If you think iPhones are commonplace now, wait until you see them at Walmart.

[via MacBytes]

Morgan Stanley analysts yesterday cut AAPL's price target to $95, mostly citing the weak economy. They said that despite price cuts, extreme interest in the iPhone, Mac users' high satisfaction, and marketshare momentum for Mac sales, the quarter will be slow for Apple.

Blog Notable Calls said it wouldn't have been surprised if AAPL slipped by five points yesterday, but instead the stock gained 34 cents a share before the closing bell.

On a brighter note, Kaufman Bros. analyst Shaw Wu sees promise in iPhone gift cards, according to Fortune's Apple 2.0 blog. As with any gift card, Apple collects revenue from the customer up front. However, Apple can't report the revenue until the phone is activated, which will likely be during the first quarter of next year.

Wu anticipates Apple will sell 6 million iPhone handsets during the company's fiscal Q1 2009, which includes October, November and December 2008. Morgan Stanley analyst Kathryn Huberty thinks Apple will sell only 4 million that same quarter.

In the same Apple 2.0 story, Philip Elmer-DeWitt notes that Piper Jaffray's Gene Munster looked at how many units Walmart might sell, after pricing details leaked on Monday. He conjectures that each Walmart store could sell 1,284 iPhones in 2009, accounting for nearly 10 percent of Apple's worldwide iPhone sales.

AAPL was up by $2.50 or so in midday trading.

Apple met or beat analyst expectations for sales over the weekend, selling 13 Macs and 3.4 iPhones every hour, according to one Piper Jaffray estimate.

Kaufman Bros. analyst Shaw Wu said that Apple's Black Friday promotions helped drive retail store traffic, according to reports from distributors. Wu also noted that the iPod touch is sold out at Amazon.com, which leads him to believe that Apple could sell $10 billion worth of products this quarter.

Thomas Weisel Partners' Doug Reid got the impression that Apple sales were up from last year. He was less optimistic about Dell's retail performance at Best Buy locations, noting that salespeople there were not strongly recommending Dell models at 35 stores they checked.

Weisel analysts expect Apple to sell 2.4 million Macs during the fourth quarter.

Deutsche Bank analysts also conducted their own checks over the weekend, and found demand to be "solid," considering the current global economic woes. They expect Apple to sell 5 million iPhones this quarter, and reiterated their "buy" rating and price target of $150 per share.

AAPL was down slightly in morning trading.

Several analysts have been lowering their expectations for iPhone sales during the first quarter of 2009, pointing to possible cuts in the number of units manufactured, according to a series of articles by Cult of Mac's Ed Sutherland.

Barclays Capital today cut its estimate of iPhone sales to 5 million handsets, down from 6.2 million. Yesterday, BMO Capital lowered its expectations to a slightly-better 5.6 million units, but still down from an earlier estimate of 6.6 million.

On Wednesday, UBS said iPhone production could drop to 6.7 million units, down from 9 million in the last quarter. Earlier this week, FBR Capital Markets analyst Craig Berger said that Apple could have already cut iPhone production by 40 percent.

Barclays analyst Ben Reitzes suggested that Apple could cut prices on iPhones and develop a new low-end handset to stimulate sales, taking the lead from how the iPod and iPod mini sold.

Reitzes also speculated that a low-cost laptop could sell 3.5 million units per year. It's unclear if Apple will take Reitzes' advice, as Steve Jobs said at last month's laptop event that "We don't know how to make a $500 computer that's not a piece of junk, and our DNA will not let us ship that."

RBC analyst Mark Abramsky says that the iPhone will exceed its projected goal of 10 million devices sold in 2008 -- possibly by selling upwards of 14 million. How is Apple going to get these sales figures? Well, Abramsky suggests that AT&T could subsidize the iPhone by up to $200 for the 8GB model. This would mean the 8GB iPhone could sell for as little as $199 (previously rumored here); and possibly increase sales by 50 to 100 percent. According to Abramsky, this would mean Apple would have to drop revenue sharing with AT&T.

Mr. Abramsky also believes that Apple will start to sell unlocked iPhones (or iPhones without a specific carrier) without a premium over the AT&T iPhones. He suggest that unlocked iPhones could increase the adoption rate by two to three times for Apple's phone.

All of Abramsky's conjecture hinges on Apple and AT&T agreeing to end their 5 year exclusivity agreement early. We here at TUAW see no real reason for either company to agree to that, at least not in the States.

The Gray Lady has published a piece examining the so-called "gray market" for iPhones in China -- legitimate products transferred through not-so-legitimate channels. Though we of course have no idea how prevalent this was before the rise of the 'Net, I have to think that the shrinking global neighborhood contributes to this a lot -- it's much easier to ask someone in another country to buy something for you when you talk to them every day on Twitter.

The NYT puts the number of non-AT&T iPhones at a whopping 1.4 million, but of course that includes unlocked phones all over the world, and people who are using iPhones without actually activating them. So we're not exactly sure of the number of iPhones floating around China (where Apple hasn't made a deal to provide official service yet). Analyst Charles Wolf says that Apple definitely enjoys listing the gray market iPhones in their sales numbers, but that the lack of an AT&T agreement with the phone sales undermines their contract plan.

However, he admits also that making the decision to sell the phones unlocked would have earned Apple more demand in the first place, so it's six in one, half-dozen in the other. There's no word on how the impending release of the SDK might affect the sale of phones for unlocking, either. But for now, it's clear that the gray market is a substantial and yet very much unknown quantity of Apple's iPhone business.

Apple Insider has an analyst saying that 10% of iPhones sold in Apple stores in September were being bought by people who are then turning around and selling them unlocked. That seems like a big number when you picture the situation Gene Munster, the analyst, describes: "one Apple employee acknowledged that customers were buying five iPhones per store visit in order to turn around and resell them unlocked."

But is it really that big? 90% of people buying iPhones are sticking with AT&T, so considering that Apple got the support of a network and a slice of the service plan profits, a number like 10% of unlocks actually seems to me like it validates Apple's choice to sell the phone locked. SDKs, jailbreaks, and customer rights (oh my) aside, if only 10% of iPhones out there are unlocked (and the number's probably much lower, as all the iPhones sold before September were probably not unlocked at all), Apple's original decision was justified, in my view.

But I'm not defending them for breaking things with 1.1.1. Apple hasn't released the numbers on September sales yet, but 10% of a lot is still a lot, in terms of bricked iPhones because of the unlock crackdown. I haven't heard any tales of folks who paid a lot for an unlocked iPhone and then got a brick with the 1.1.1 update, but I'm sure they're out there and unhappy.

Think you're worth 3 bucks a month? Or even 11 bucks a month? Those are the figures being bandied around today over at Seeking Alpha regarding the secret details of AT&T's revenue sharing with Apple. The post suggests that AT&T may be paying Apple $3/month for AT&T customers who switch to the iPhone and $11/month for iPhone customers who have switched carriers to AT&T. They cite a recent Piper Jaffray research note authored by analyst Gene Munster.

That sounds like a lot of money to me (especially for the switching customers) heading off to Apple along with the revenues on the physical iPhone sales.

Yesterday's prelim 4th quarter report was great news for Apple's health as a manufacturer of personal computers - they shipped over 1.6 million Macs, the most ever in a quarter and 30% more than the previous quarter. Today's news of a rise to 6.1 percent market share in the U.S. from Gartner, however, has the Mac web doing the market share dance all over again, as just a year ago this month it was the NPD Group reporting that Apple's U.S. market share - excluding online sales - had risen to 6.6 percent. The confusion ensues when considering MacNN's conflicting report from Gartner claiming Apple's U.S. share just rose to 6.1 percent. Of course where and how these different groups are getting their numbers is unbeknownst to this blogger, but methinks something might have been lost in translation between all these analysts.

Still, while market share numbers might be getting a little fuzzy as of late, we can at least trust Apple's announcement of selling the most.Macs.evar in a quarter, and that's alright with me.

I've noticed a couple reports from analyst firm Gartner Research that claim Apple's pricing on the new iPods betrays an increased interest in profit margins at the expense of market share. These reports focus on the iPod nano's pricing of $199/4GB and $249/8GB as being a bit high, given their estimated materials cost of $90 and $130, respectively. Admittedly, similar players from competitors such as Creative do beat out Apple in pricing; the ZEN V 4GB player is only $159.99 - but what rulebook dictates that a higher price on one particular member of a product family (by and far the most popular member) definitively means the company doesn't care about market share?

These reports don't seem to mention anything about the nano's big brother (unless MacNN and Playlist used some sneaky cut and pasting techniques), where Apple is competing quite well: they dropped their 30GB iPod price to match that of Creative's 30GB ZEN Vision:M ($249), and the 60GB ZEN Vision:M (if you can find it on their site), is reportedly $399 - a full $50 more expensive for 20GB of less storage.

Gartner's claim that competitors like Creative and Microsoft's new Zune could start chomping at the iPod's market share, based solely on the profit margins of one member of the family, also doesn't seem to take into account the value of the full package that Apple's iPod offers, such as seamless, 'it just works' integration with a leading digital media store (maybe Gatner simply forgot that the existence of Apple's margin-thin digital store leans fairly heavily on the popularity of the iPod).

While there are plenty of consumers out there to whom a $40 difference between an iPod nano and a ZEN V can (understandably) make or break a purchase, the are still other important factors consumers can evaluate for a DAP purchase. Unfortunately, some of these elements aren't capable of being factored into an analyst's equations, but Apple is clearly still banking on their weight with a consumer's dollar.