We had hedge-fund manager Jeff Matthews of RAM Partners on TechTicker the other day (Jeff writes Jeff Matthews Is Not Making This Up, an excellent finance and investing blog). 

We got to talking about Apple, and Jeff tossed out a startling prediction for Apple’s iPad business:

Apple, Jeff said, will soon sell 50 million iPads a year.

Given the amazing start the device has had, this forecast is hardly wild: 4 million iPads have been sold already, and ~12 million should be sold this year.  So selling 50 million in a couple of years doesn’t sound like a stretch, especially if the price comes down.

Before the iPad launched, we predicted that the truly revolutionary impact of the product would come in three years, when the basic iPads cost $199 apiece and families bought 3-4 of them and just left them lying around the house (in place of books, magazines, laptops, etc.)

Given the waves the iPad has made already, this scenario seems even more likely.  (Yes, there will be competition, especially from Android-based tablets.  But this market is wide-open enough that we expect Apple to be able to maintain strong growth for at least a few years.)

So how much revenue would Apple generate if/when it sells 50 million iPads a year?

The current ASP (average selling price) for the product is somewhere in the ~$650 range.  Over the next couple of years, the ASP will likely drop significantly, perhaps to the ~$400 range.

50 million units at $400 apiece would be $20 billion of revenue.  That compares to Apple’s ~$60 billion of revenue today.

(For what it’s worth, in our first post on the iPad, we predicted that the company would eventually sell 100 million units a year at $199 apiece, for the same $20 billion of revenue. Maybe it will be 100 million at $400…)

Don’t Miss: The Truth About The iPad, Day 100

Join the conversation about this story »

See Also:

• We Have Seen The Amazing Future Of Apple’s iPad And This Is It
• The Truth About The iPad, Day 100