Apple says it sold more than 300,000 iPads on its first day of sales on Saturday across the U.S. Will Apple shares continue to rise on its new product? Yair Reiner, applied technology senior analyst at Oppenheimer, shared his views.
“The bet is, this is going to be a very big device over time but it will take time to build, because you don’t introduce a new device and expect that to take hold overnight,” Reiner told CNBC.
Reiner said he expects Apple's iPad to "cannibalize" sales of competitors who are trying to sell netbooks.
“If you look at the margin, the iPhone has margins that are close to 60 percent in gross margins and the rest of Apple’s hardware’s closer to 30 to 35,” he said. “I think this (iPad) is going to be in the middle—probably 40 to 50 percent gross margins.”
However, iPad’s success will not have a huge impact on earnings in 2010 or 2011, noted Reiner.
“And if you look at the multiple right now, Apple’s multiple is now not very much above that of the S&P in general,” he said. “So iPad’s success is not in the stock either in terms of the numbers, sentiment or multiples."
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Reiner does not own shares o AAPL.