Apple Stock Forecast: The $299 Apple iPad 2018 Is A Killer Gaming/Enterprise-Level Tablet

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

Summary:

  • The new 9.7-inch iPad 2018 is not only intended for the education market. It can also appeal to home and business/enterprise users.
  • Apple equipping the $299/$329 iPad with A10 Fusion CPU/GPU also makes it the best gaming tablet.
  • The 6-core PowerVR GPU of the quad-core A10 Fusion SoC is almost as good as the A11 Bionic’s Apple-made GPU.
  • Apple is taking a risk. The $299/$329 9.7-inch iPad might cannibalize future sales of premium $649++ iPad Pro models.
  • On the other hand, Apple could likely increase the total addressable market of its tablets by catering to price-conscious customers.

Apple (AAPL) ended 2017 as the top vendor of tablets with more than 26% of global market share. I expect it to remain the leader in tablet shipments for many years to come. Apple’s decision to offer its latest sixth-generation 9.7-inch iPad for just $299 to students/schools (and $329 to regular customers) can help it sell 13 million+++ tablets quarterly.

The future impact of Apple’s event yesterday goes beyond the education market. I expect this latest budget tablet to appeal not only to students/schools but also to gamers and home/office users.  By making this latest iPad compatible with the Apple Pencil stylus, small and medium business (who couldn’t afford $649++ 10.5-inch iPad Pros) might likely become new customers. The enterprise/business market for tablets is obviously much larger than the K-12/college education market.

The image below illustrates why corporate employees and business owners should consider buying a $329 iPad.  It’s a semi-iPad Pro!

(Source: Apple)

Apple Is Not Afraid of Taking Risks

Yes, there is some risk that a $329 iPad can cannibalize future sales of much more expensive iPad Pro models. However, companies who do not take risks are inept. The bright side of this new move is that Apple is betting it could increase its total addressable market by selling an affordable enterprise-level iPad. Apple now offers an enterprise-level tablet for less than $350.

Apple selling a budget tablet can help attract small/medium enterprise customers away from sub-$300 Windows 10 laptops, Chromebooks, and Android tablets. The A10 Fusion SoC-equipped $329 iPad 2018 can function like the premium iPad Pros (equipped with A10X SoC) in the office, on the road, and at home. The single-core processor compute performance of the A10X Fusion is just 14% faster than the A10 Fusion.

The 2018 iPad is compatible with the $99 ($89 for students/schools) Apple Pencil or other third-party brand of stylus. Furthermore, Apple has made new updates to its free iWork productivity suite to make it Pencil/stylus-compatible.  Apple might also extend the free 200GB iCloud storage to non-student users of the $329 iPad 2018. An improved iWork office suite coupled with free large cloud storage per user is an attractive proposition for small and large enterprise buyers.

The lower hardware margin on the 2018 iPad can be offset through sales of Apple Pencil and iTunes purchases. Some digital artists, employees, students, and teachers will eventually buy iOS apps/games, e-books, streaming TV/Music/movie subscriptions through their company or school-issued iPads.

Mobile Gamers Will Also Appreciate This Cheap iPad 

Many K-12/college students/teachers are gamers. They will certainly appreciate Apple’s use of the A10 Fusion SoC (System-on-Chip) on the $299 iPad 2018. The integrated 6-core PowerVR-based GPU (Graphics Processing Unit) n the A10 Fusion SoC is as good as Apple’s own integrated GPU for the A11 Bionic SoC.

Based on the Arena of Valor (Ultra Graphics Settings) test of Notebook Check, the A11 Bionic’s GPU is only 2% better than the PowerVR GPU of the A10. That’s a negligible difference. Due to its affordability, the iPad 2018 can become the best tablet for casual and hardcore mobile gamers.

(Source: Notebook Check)

The advent of console/PC-quality iOS games like Arena of Valor and Fortnite is boosting the mobile platform as the growth driver for video games. It makes perfect sense for Apple to sell a $299/$329 gaming tablet that can outperform Android tablets with Nvidia (NVDA) Tegra K1 GPUs. Keeping its number one status in global tablet shipments requires Apple to cater to mobile gamers.

Selling a budget iPad increases the number of iOS gamers. The more iOS gamers there are, the better it is for Apple’s 30% commission rate from iTunes App Store purchases.

Final Thoughts

Apple’s move to release a budget iPad that can be used for enterprise productivity and high-end mobile gaming is commendable. It is another good reason to stay long AAPL. The management of this company is ready to take risks which could lead to better long-term iPad sales.

I Know First has a very bullish one-year market trend forecast score (more than 200) for AAPL. I am therefore endorsing this stock as a buy.

The monthly technical indicators/moving averages of AAPL also supports my buy rating for AAPL.

Past I Know First Success With AAPL

Apple_forecast20180218

On February 18, 2018, I Know First published a premium article saying that it’s time to buy Apple’s stock as it would likely be growing in price in 2018. I Know First has been bullish on Apple’s stock on 1, 3 months and 1 year time horizon. As the time went by we expected that Apple’s stock would likely to significantly rise, especially in 3 month and 1 year perspective and hit the level of $170-$180 per share which has already happened. We suggested to buy it at that time and not to lose the increasing momentum. From the below graph one can see that on 1 month horizon the algorithm successfully predicted the movement of the AAPL stock price which is rise by 5.31%.

(Source: Yahoo Finance)

This bullish forecast for AAPL was sent to I Know First subscribers on On February 18, 2018.

To subscribe today click here.

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

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