Apple Inc.’s (Nasdaq: AAPL) shares rose to a record and the company’s market value surpassed $600 billion on speculation that production has started on a smaller version of the iPad tablet as well as a new television product.
The shares climbed 1.9 percent to $648.11 at the close in New York Friday, for a market capitalization of $602.3 billion. The stock of the world’s most valuable company has gained 60 percent this year.
With tablet sales predicted by research firm Yankee Group to overtake those of personal computers by 2015, Apple is introducing a smaller iPad model to fend off challengers to its top-selling device. That may go on sale by October and a new television could reach stores by 2013, according a research report from Peter Misek, an analyst at Jefferies & Co.
“We believe the iTV is in full production,” Misek said in the report yesterday. He recommends buying the shares and raised his price estimate to $900 from $800.
Misek points to activity at Sharp Corp., a maker of TV screens, and Hon Hai Precision Industry Co., the company that assembles the iPad for Apple, and other specialty chemical and TV component suppliers as the basis for his predictions. Hon Hai’s revenue rose 5 percent in July from June, while sales are typically unchanged at this time of year, he said.
Microsoft Corp. (Nasdaq: MSFT) later this year will begin selling its Surface tablet, while Google Inc. (Nasdaq: GOOG) introduced its Nexus 7 device in June. Amazon.com Inc.’s Kindle Fire tablet debuted last year.
Apple plans to roll out a smaller, cheaper iPad by the end of this year, people familiar with the plans said in July. Misek said Apple would sell at least 8 million of the miniature iPad in the three-month period ending in December, and generate about $2.4 billion in revenue by pricing the device at $300.
The company’s shipments of iPads surged 44 percent to 17 million in the second quarter, giving the company its biggest share of the market in more than a year as devices from competitors lost ground, a report this month from IHS said.
For its television product, Apple is in talks with at least one of the largest U.S. cable companies about teaming up on a product to carry live television and other content, a person with knowledge of the plans said this week.
An Apple TV could sell about 2 million units in the quarter ending in December, with an average price of about $1,250, Misek projects.
Apple is also preparing for next month’s debut of a new iPhone. The smartphone is Apple’s top source of revenue and Misek and other analysts are predicting it will be the company’s biggest product debut ever.