By Connie Guglielmo
(Bloomberg) — Apple Inc. (AAPL), seeking to win a larger share of the market for handheld computers, is planning to unveil a tablet computer this month, according to a person familiar with the matter.
The mobile device is scheduled to go on sale in March, said the person, who declined to be identified because details of the product are private.
Offering a tablet would help Apple capitalize on demand from consumers for devices that can surf the Web and play movies and music. The product may also spark fresh competition for Amazon.com Inc. (AMZN), maker of the Kindle electronic-book reader, as well as makers of netbooks such as Acer Inc., Asustek Computer Inc. and Hewlett-Packard Co. (HPQ)
"We expect the key differentiator of the device to be its software," Gene Munster, an analyst at Piper Jaffray & Co. in Minneapolis, said in a note to clients last week. "Apple's tablet would compete well in the netbook category, even though it would not be a netbook."
Apple might sell about 1.4 million tablets in 2010 if the product goes on sale in March, Munster said. If the product sells for about $600, that would increase the company's sales by about 2 percent, he said.
"We are not going to comment on rumors and speculation," said Steve Dowling, a spokesman for Cupertino, California-based Apple.
Drew Herdener, a spokesman for Amazon, declined to comment.
Online ContentApple may design the tablet to support the more than 100,000 applications currently available on its iPhone, Munster said. The company said today customers have downloaded more than 3 billion such programs in less than 18 months.
To distinguish the tablet from Amazon's Kindle DX and other e-book readers, Apple may turn e-books and magazines into interactive experiences, with links that call up videos such as author interviews, photos, audio, Web sites and other content, including advertising, according to Kathryn Huberty, an analyst with Morgan Stanley in New York. She expects a 10-inch (25-centimeter) touchscreen device with built-in WiFi for connecting to the Web.
Apple said today it bought Quattro Wireless, a provider of mobile advertising. Quattro's technology lets advertisers target specific types of consumers while they browse the mobile Web or use applications they have downloaded to their wireless devices.
Quattro Chief Executive Officer Andrew Miller was named vice president of mobile advertising at Apple, the Waltham, Massachusetts-based startup said in a blog posting. The price is $275 million, All Things Digital reported yesterday, citing unidentified people. Apple declined to disclose the terms.
Oversized iPodApple, which also makes the Macintosh computer, gained 37 cents to a record $214.38 at 4 p.m. New York time on the Nasdaq Stock Market. The shares more than doubled last year on investor optimism Apple will continue to sell more Macs and iPhones and add new products.
Analysts, including UBS AG's Maynard Um, expect the tablet could be an oversized version of Apple's 3.5-inch iPod Touch media player. Or it may take the form of a scaled-down notebook computer, said Um, based in New York.
The Wall Street Journal reported the expected release date of the tablet yesterday.
10 MillionApple expects to ship 10 million tablet computers in the device's first year of release, former Google Inc. (GOOG) executive Lee Kai-fu wrote on his blog last week, citing a friend familiar with the project whom he didn't name.
The device will be introduced by Apple CEO Steve Jobs this month and sell for less than $1,000, according to the post dated Dec. 28. It will have a 10.1 inch multitouch screen with three-dimensional graphics and look like a large iPhone, Lee wrote.
Lee, who was president of Google's Chinese operations, left the company in September to start Innovation Works, a Beijing-based technology fund with investment from WI Harper Group and Foxconn Technology Group. Foxconn's flagship Hon Hai Precision Industry Co. business is the world's largest electronics manufacturer and the supplier of Apple's iPhone.
Lee said in an e-mail to Bloomberg News last week that the information didn't come from Foxconn or Apple.